Effective 9th June, 2025, the definition of UPSI or Unpublished Price Sensitive Information has been extended to now include items that may otherwise have been considered operational in nature or regular “BAU” items. A lot of them are considered “deemed UPSIs” under the SEBI (PIT) Amendment Regulations, 2025.
Compliance officers now need to update the structured digital database or SDD and even close the trading window for a larger number of such events.
Price sensitivity, impact on profitability, prospects and turnover and the general underlying materiality are the typical considerations, though the subjectivity element appears to be reducing with a rather prescriptive list of what should be entered. This, while re-iterating that the guidance is illustrative in nature and not definitive.
It was clarified that trading window closure need not be done where UPSI is not emanating from within the listed entity
By way of background, back in 2023, SEBI had proposed that every material event be considered UPSI. Based on the concerns that there would be a significant increase in potential closures of trading windows up to being almost perpetually closed, the proposal was kept on hold by SEBI pending a review of the framework for material events, trading plans and market rumours etc.
So, what is in the updated list?
Summarization of some of the Determined Material Events added to UPSI list
-Granting/ withdrawal/ surrender/ cancellation/ suspension of key licences or regulatory approvals.
-Award or termination of order or contracts outside normal course of business.
-Outcome of litigations/disputes that may impact the company.
-Guaranty/ indemnity/ surety for any third party outside the normal course of business.
Summarization of some of the Deemed Material Events appended to the UPSI list
-Action or orders within or outside India by any regulatory, statutory, enforcement or judicial authority against the company, directors, KMP, promoters or subsidiary.
-Resolution, restructuring or one-time settlement in relation to loans/borrowings from financial institutions
-Agreements that may impact management or control
-Change in ratings (but not changes in ESG rating),
-Proposed fundraising
-A host of activities related to winding-up petitions based on filing or admission.
-Initiation of forensic audits related mis-statement/misappropriations/ siphoning or diversion
Recording of UPSI which is emanating outside the listed entity has to be made in SDD within 2 calendar days from the receipt of such information.
Obviously, since a significantly diverse set of information may be deemed material the list can only be illustrative and not definitive or exhaustive.
Maintaining a pre-created list of potential UPSI items (i.e. a Library of UPSI) is the ideal approach for every listed entity to manage the increasing requirements .
At the same time, this list needs to be capable of immediate and contextual expansion with more detailed UPSI items.
This, of course, raises the issue that the manner in which UPSI is listed and detailed will not necessarily mirror the manner in which it is searched for or requested or extracted.
Applications like Affinis(SDD) are intelligently designed to pre-address all of these issues, with (1) a pre-supplied library (2) the ability for Compliance Officers to add UPSI events or items at will at any time centrally for immediate organization-wide compliance (3) the ability to group items in the library for a second layer of descriptions or to ease identification and reporting. All of this while still retaining the ability to add the odd event not listed in the library at will. The Affinis suite maintains its lead in creating solutions to tomorrow’s problems today.
