SEC has amended the SEC Prohibition of Insider Trading Regulations vide notification dated 19^th  November 2008, available  here . While I will post here later in more detail some issues relating to the amendments, let me highlight a couple of points.

The definition of “insider” has been amended. Interestingly, there is magic  involved here! Not one word has been added or deleted. But the meaning of the term “insider” has changed substantially! For example, now, any person who receives or has access to unpublished price sensitive information is an “insider”.  (This magic is achieved by dropping just one comma and breaking up the definition in into two paragraphs). 

It is also required that the Code to be framed by listed companies, etc. in a form as near to the Model given should be framed “without diluting (the Model) in any manner and ensure compliance of the same”. It will be interesting to examine what the words “without diluting” could mean, in law. 

As per the amended Code, Directors/officers/designated employees are prohibited from carrying out an opposite transaction for six months. Thus, if such a person buys even one share, he cannot sell any share for six months. And, if he sells even one share, he cannot buy even a single share for six months. 

A transitional issue will arise as to whether this restriction would apply even if purchases/sales were made before this amendment. 

Furthermore, it seems that such persons, as per the amended Code, cannot at all and ever take any position in derivatives relating to shares of the Company!

There are other changes and I will post a more detailed discussion in a day or two on the amendments.

–    Jayant Thakur