The Securities & Exchange Board of India
(Prohibition of Insider Trading) Regulations, 1992, was amended on 22nd
February 2002 (hereinafter referred to as “Regulations”) in terms of which a
Stock Broker is required, inter alia, to frame a Code of Conduct for Prevention
of Insider Trading by Employees of a Stock Broker, including its Directors
In line with the said Regulations, the following
Code of Conduct (hereinafter referred to as “the Code”) has been adopted by
Gandhi Securities & Investment Pvt Ltd (hereinafter referred to as “GSI”),
Member of the Stock Exchange, Mumbai
1.1 GSI has
a Compliance Officer reporting to the Managing Director
1.2 The
Compliance Officer shall be responsible for setting forth Policies and
Procedures and monitoring adherence to the Rules for the preservation of
"Price Sensitive Information", pre-clearing of all Designated
Employees and their Dependents Trades (directly or through respective
Department heads as decided by the GSI), monitoring of Trades and the
Implementation of the Code of Conduct under the overall Supervision of the
Directors
1.3 The
Compliance Officer shall also assist all the Employees / Directors in
addressing any Clarifications regarding SEBI (Prohibition of Insider Trading)
Regulations, 1992 and GSI’s Code
1.4 The
Compliance Officer shall maintain a record of the Designated Employees and any
Changes made in the List of Designated Employees
2.1 Employees / Directors shall
maintain the Confidentiality of all Price Sensitive Information. Employees /
Directors must not pass on such Information directly or indirectly by way of
making a Recommendation for the Purchase or Sale of Securities
2.2 Need
to Know
2.2.1 Price Sensitive Information is to be handled
on a "Need to Know" basis, ie Price Sensitive Information should be
disclosed only to those within GSI, who need the Information to discharge their
Duty and whose Possession of such Information will not give rise to a Conflict
of Interest or Appearance of Misuse of the Information
2.3 Limited
Access to Confidential Information
2.3.1 Files containing Confidential Information
shall be kept Secure. Computer Files must have Adequate Security of Login and
Password, etc
2.4 Chinese Wall
2.4.1 To
prevent the Misuse of Confidential Information, GSI shall adopt a "Chinese
Wall" Policy which separates those Areas of GSI, which routinely have
access to Confidential Information, considered "Inside Areas" from
those Areas which deal with Sale / Marketing / Investment Advise or other
Departments providing Support Services, considered "Public Areas"
2.4.2 The
Employees in the Inside Area shall not communicate any Price Sensitive
Information to anyone in Public Area
2.4.3 The
Employees in Inside Area may be physically segregated from Employees in Public
Area
2.4.4 Demarcation
of the various Departments as Inside Area may be implemented by GSI
2.4.5 In
Exceptional Circumstances, Employees from the Public Areas may be brought
"Over the Wall" and given Confidential Information on the basis of
"Need to Know" Criteria, under Intimation to the Compliance Officer
3.1 Employees / Directors shall not
use Price Sensitive Information to Buy or Sell Securities of any sort, whether
for their Own Account, their Relative’s Account, GSI’s Account or a Client's
Account. The following Trading Restrictions shall apply for Trading in
Securities
3.2 Pre-clearance
of Trades
3.2.1 All
Directors / Designated Employees of GSI, who intend to deal in the Securities
of the Client Company (above a Minimum Threshold Limit to be determined by GSI)
shall pre-clear the Transactions as per the pre-dealing Procedure as described
hereunder
3.3.2 An
Application may be made in such form as GSI may specify in this regard, to the
Compliance Officer indicating the Name and Estimated Number of Securities that
the Designated Employee / Director intends to deal in, the Details as to the
Depository with which he has a Security Account, the Details as to the
Securities in such Depository Mode and such other Details as may be required by
any rule made by GSI in this behalf
3.3.4 An
Undertaking shall be executed in favor of GSI by such Designated Employee /
Directors incorporating, inter alia, the following Clauses, as may be
applicable
i That the designated Employee / Director does
not have any Access or has not received any "Price Sensitive
Information" upto the time of signing the Undertaking
ii That in case the designated employee /
director/partner has access to or receives "Price Sensitive
Information" after the signing of the undertaking but before the execution
of the transaction he/she shall inform the Compliance officer of the change in
his position and that he/she would completely refrain from dealing in the
securities of the client company till the time such information becomes public.
iii That he / she has not contravened the Code of
Conduct for prevention of Insider Trading as specified by GSI from time to time
iv That
he / she has made a Full and True Disclosure in the matter
4.1 In
order to monitor Chinese Wall Procedures and Trading in Client Securities based
on Inside Information, GSI shall restrict Trading in certain Securities and
designate such List as Restricted / Grey List
4.2 Security of a Listed Company
shall be put on the Restricted / Grey List if GSI is handling any Assignment
for the Listed Company or is preparing Appraisal Report or is handling Credit
Rating Assignments and is Privy to Price Sensitive Information
4.3 Any
Security, which is being purchased or sold or is being considered for Purchase
or Sale by GSI on behalf of its Clients / Schemes of Mutual Funds, etc shall be
put on the Restricted / Grey List
4.4 As the
Restricted List itself is a Highly Confidential Information it shall not be
communicated directly, or indirectly to anyone outside GSI. The Restricted List
shall be maintained by Compliance Officer
4.5 When
any Securities are on the Restricted List, Trading in these Securities by
Designated Employees / Directors may blocked or may be disallowed at the time
of pre-clearance
5.1 All
Directors / Designated Employees shall execute their Order within One
Week after the approval of pre-clearance is given. If the Order is not executed
within One Week after Approval is given, the Employee / Director must pre-clear
the Transaction again
5.2 All
Directors / Designated Employees shall hold their Investments for a
Minimum Period of 30 Days in order to be considered as being held for
Investment Purposes
5.3 The
Holding Period shall also apply to Purchases in the Primary Market (IPOs). In
the case of IPOs, the Holding Period would commence when the Securities are
actually allotted
5.4 In case
the Sale of Securities is necessitated by Personal Emergency, the Holding
Period may be waived by the Compliance Officer after recording in Writing his /
her reasons in this regard
5.5 Analysts, if any, employed with
GSI while preparing Research Reports of a Client Company(s) shall disclose
their Share Holdings / Interest in such Company(s) to the Compliance Officer
5.6 Analysts, who prepare Research
Report of a Listed Company shall not Trade in Securities of that Company for 30
Days from Preparation of such Report
6.1 Any
Designated Employee / Director who trades in Securities or communicates any
Information or counsels any Person Trading in Securities, in Contravention of
the Code may be penalised and appropriate Action may be taken by GSI
6.2 Designated Employees /
Directors of GSI, who violate the Code may also be subject to Disciplinary
Action by the Company, which may include Wage Freeze, Suspension, etc
6.3 The
Action by GSI shall not preclude SEBI from taking any Action in case of
Violation of SEBI (Prohibition of Insider Trading) Regulations, 1992
7 Information to SEBI in case of Violation of SEBI (Prohibition of Insider Trading) Regulations
7.1 In case
it is observed by GSI / it’s Compliance Officer that there has been a Violation
of these Regulations, SEBI shall be informed by GSI
8 Listed
Intermediaries to comply with both Part A and B of Schedule I
8.1 The
Intermediaries such as Credit Rating Agencies, Asset Management Companies, or
Broking Companies etc whose Securities are listed in Recognised Stock Exchange
shall comply with both Part A and Part B of this Schedule in respect of its Own
Securities and Client’s Securities
By Order of the Board of Directors of
Gandhi Securities & Investment Pvt Ltd (GSI)
Sd/-
Compliance Officer
Place Mumbai
Date 25.02.2002