Does a company need to maintain SDD if it is under Corporate Insolvency Resolution Process (CIRP)?
Yes. The provisions of the regulations requiring maintenance of the Structured Digital Database are applicable to all listed entities while a circular dated 3 January 2018 issued by the IBBI requires Resolution Professionals to ensure compliance with all applicable laws.
Why insolvency further triggers the obligation rather than relieving it
The corporate insolvency resolution process does not delist the company. The securities remain listed, the obligation follows the listing, and nothing in the process suspends the requirement to maintain the database.
The amended definition of unpublished price sensitive information now makes this more direct than it was. Following the SEBI (Prohibition of Insider Trading) Amendment Regulations, 2025, effective from 9 June 2025, several insolvency events are named in the list itself:
- admission of a winding-up petition or a corporate insolvency application
- approval or rejection of a resolution plan
- a resolution plan, a restructuring, or a one-time settlement of loans
- fraud or default by the company, its promoter, a director, key managerial personnel or a subsidiary
- initiation of a forensic audit and receipt of the forensic audit report
- a change in credit rating, other than an ESG rating
Each of those is ordinary traffic in a resolution process, and each is information the company must be able to show it controlled.
The process moves information to outsiders by design
Section 29 of the Insolvency and Bankruptcy Code, 2016 requires the resolution professional to prepare an information memorandum so that a resolution applicant can formulate a plan. Section 29(2) requires that applicant, before receiving it, to undertake to comply with the law on confidentiality and on insider trading, to protect any intellectual property of the corporate debtor it gains access to, and not to pass the information on.
The Code therefore contemplates in terms that a resolution applicant receives information which engages insider trading law. That is unpublished price sensitive information travelling to an external party, and the recipients multiply as the process runs:
- the resolution professional, and the professional’s own team
- members of the committee of creditors, and the officers they nominate
- each prospective resolution applicant that receives the information memorandum
- the valuers, auditors, lawyers and advisers engaged on either side
These are the external recipients the database exists to trace, and a resolution process produces more of them than the ordinary course does.
Who is responsible once the board is suspended
The resolution professional. The circular of 3 January 2018 cited above requires an insolvency professional to exercise reasonable care and diligence, and to take all necessary steps to ensure that the corporate person complies with the applicable laws. Maintaining the structured digital database is one of those laws.
Note: The IBBI issued three circulars on 3 January 2018 with this being one of them, referred to by its date and including the substance.
The relaxations available to a company under the process do not reach this. Those that exist concern the composition of the board and its committees under the listing regulations. The insider trading obligations are not among them, and a suspended board does not suspend the database.
Related questions are answered separately. On how soon an entry must follow the sharing, see when to record in the SDD. On sharing by people who themselves received the information, see the downstream sharing requirement. On an issuer whose only listed securities are debt, which is common in a resolution process, see the SDD obligation for debt-listed entities. The database itself is described on Affinisio(SDD) structured digital database software, and what qualifies as price sensitive is set out in the guide to UPSI.
