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SEBI widens the scope of Deemed connected Person - MMJC
Securities and Exchange Board of India (‘SEBI’) vide its amendment notification dt: December 4, 2024, has made effective amendment to definition of Connected Person as approved by the SEBI Board at its meeting held on September 30, 2024.
Pursuant to this amendment ‘relatives’ of connected persons would be considered deemed connected persons. Prior to the amendment, ‘immediate relatives’ of connected persons were considered deemed connected person.
Deemed Connected Persons – Relatives
- Relative of Connected Persons: With this amendment, following persons will additionally be considered as “Deemed Connected Persons”:
- Spouses of siblings of the connected person, or of the spouse.
- Spouses of the children of the connected person or of the spouse.
The spouse of the connected person would continue to be a deemed connected person.
Prior to this amendment – Parents, Siblings and Child of the connected person or of the spouse were considered as deemed connected person if they were financially dependent on connected person or consulted the connected person for taking decisions relating to trading in securities.
With the amendment now Parents, Siblings and Child of the connected person or of the spouse would be deemed connected person irrespective of financial dependency or consultation for taking trading decisions.
- Deemed Connected Persons – Fiduciary
SEBI has further stated that where a connected person is a partner in a firm, then the firm its partners and employees of the firm would be considered as deemed connected person.
Further, if a connected person is residing with a person or sharing a household with a person, that person(s) would also be considered as deemed connected person.
Deemed connected persons continue to bear the onus of proving innocence in insider trading allegations.
Link of the SEBI amendment to PIT regulations is provided below:
https://egazette.gov.in/(S(1z20m0fuzxe0can3ryve3s1r))/ViewPDF.aspx,