Final interview round
with a Top 100 Listed Company
So far, things were going well—smooth introduction, solid discussions. I was confident.
Then came the question:
“Saeed, can you define UPSI?”
I smiled.
Easy question.
Just five items to remember.
I answered without hesitation.
But then, something hit me.
This was 2024
💭 "What if this interview had been last week?"
I would have frozen.
I would have stumbled.
I might have even failed.
Because SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2025 had just rewritten the definition of UPSI!
This isn’t just another amendment.
This changes how listed entities
-manage sensitive information,
-disclose it, and
-Stay compliant.
So, what’s changed?
And more importantly,
what action should listed companies take?
👇 Let’s break down the real impact of SEBI’s latest PIT amendment!
# Key Changes in the Definition of UPSI (Effective Sunday, 8 June 2025)
Now UPSI:-
1. Change in Credit Ratings (Excluding ESG Ratings)
Adani Ports' credit rating was recently downgraded due to high debt levels.
The stock reacted negatively in the market.
Investors panic.
Stock price plummets.
Amendment:
Change in the Ratings(s) other than ESG rating(s)
Reference:
Clause 3 of Para A of Part A of Schedule III under Regulation 30
Key Takeaway:
Only upward or downward revision is included in the illustrative list of events in UPSI definition.
Key notes:
1. New ratings are assigned to the instruments issued by the listed entity. Such issuance would be covered either in the current definition of UPSI ('change in capital structure') or under the new amendment ("fund raising proposed to be undertaken")
2. Hence only upward or downward revision is included in the illustrative list of events in UPSI definition.
3. Getting same ratings for fresh issue or revalidated letters may not have impact on the price of the shares hence, it is not classified as UPSI.
Remember when Zomato raised funds through an IPO?
If insiders knew about it before the announcement and traded stocks, that would be insider trading.
2. Fundraising Proposals Now Considered UPSI
Amendment:
Fund raising proposed to be undertaken:
Reference:
Clause 4 of Para A of Part A of Schedule III under Regulation 30
Key Notes:
1. Decisions related to dividends, buyback of securities, changes in capital structure, financial results and delisting that are required to be disclosed as part of outcome of board meeting are already included in the current definition of UPSI.
2. The decision with respect to fund raising proposed to be undertaken” is currently not included in the definition of UPSI.
3. Therefore, SEBI now has explicitly included fundraising in the illustrative list of UPSI.
3. Key Agreements that Impact Management or Control
Elon Musk’s hostile takeover of Twitter caught everyone off guard!
Reference:
Clause 5 and 5A of Para A of Part A of Schedule III under Regulation 30
Amendment Language:
Agreements, by whatever name called, which may impact the management or control of the company.
Key notes:
Only those agreements that:
1. impact the management and control of the company and
2. are in knowledge of the company may be considered as price sensitive and included in the illustrative list of UPSI.
4. Fraud, Defaults & Arrests
💡 Remember this:
When DHFL was caught in a ₹34,000 crore fraud, its stock crashed overnight!
Amendment Language:
fraud or defaults by the company, its promoter, director, key managerial personnel, or subsidiary or arrest of key managerial personnel, promoter or director of the company, whether occurred within India or abroad.
Reference:
Clause 6 of Para A of Part A of Schedule III and Clause 9 of Para B of Part A of Schedule III under Regulation 30
Keynotes:
1. This information would be considered as UPSI.
2. The definition of fraud and default are aligned with definitions of fraud and default as defined in Clause 6 of paragraph A of Part A of Schedule III of SEBI (LODR) Regulations, 2015.
💡 Imagine:
If SpiceJet negotiates a one-time settlement with banks, it affects investors.
That affects its survival—and share prices.
So, it’s now UPSI.
Dear Company Secretary,
Are you spending hours scrolling SEBI and MCA sites for ..
1. Company law Amendments
2. Securities laws Amendments
3. Detailed analysis of latest case laws.
Well, Already 2845+ Company secretaries get them delivered to their inbox.
You too can join our Passionate CS Email Community with the link given below
And get all of this,
delivered weekly, straight to your inbox.
No noise.
No nonsense.
Just pure value…..A CS’s Commitment🤞
So let’s continue with our Amendments
5. Restructuring & One-Time Settlements (OTS) in Loans/Borrowings
Amendment Language:
Resolution plan/ restructuring or one time settlement in relation to loans/borrowings from banks/financial institutions
Reference:
Clause 9 and 10 of Para A of Part A of Schedule III under Regulation 30
Key Notes:
The regulator has proposed the inclusion of restructuring plans, one-time bank settlements and other significant financial restructurings as UPSI
6. Admission of Insolvency & Winding-Up Petitions
Amendment Language:
Admission of winding-up petition filed by any party /creditors and admission of application by the Tribunal filed by the corporate applicant or financial creditors for initiation of corporate insolvency resolution process against the company as a corporate debtor, approval of resolution plan or rejection thereof under the Insolvency and Bankruptcy Code, 2016;
Reference:
Clause 11 and 16 of Para A of Part A of Schedule III under Regulation 30
Keynotes
1. Not all events in relation to corporate insolvency resolution process (‘CIRP’) listed in Clause16 of Para A of Part A of Schedule III such as Filing of application by the corporate applicant/ Financial creditor or operational creditor, Filing of resolution plan with tribunal, Number of resolution plans received etc may impact share price.
2. Thus, only admission of petition for initiation of CIRP and approval / rejection of resolution plan by NCLT may be price sensitive.
3. On Similar lines, only admission of the winding up petition by NCLT may be price sensitive hence considered UPSI.
💡 Why this is smart:
Not every insolvency petition impacts stock prices.
But if NCLT admits one, that’s serious news.
Example: When Jet Airways filed for insolvency, its stock tanked
Do you agree…If a company is being audited for *financial fraud*, shouldn’t investors know?
7. Forensic Audits: What’s Now UPSI?
Amendment Language:
Initiation of forensic audit (by whatever name called) by company or any other entity for detecting mis-statement in financials, misappropriation/ siphoning or diversion of funds and receipt of final forensic audit report.
Reference:
Clause 17 of Para A of Part A of Schedule III under Regulation 30
Keynotes:
1. Initiation of Forensic audit may be price sensitive.
2. Forensic audits as mentioned in the above sub-clause of LODR refers to those audits, (by whatever name called), which are initiated with the objective of detecting any mis-statement in financials, mis-appropriation/ siphoning or diversion of funds.
3. It does not seek to cover disclosure of audit of matters such as product quality control practices, manufacturing practices, recruitment practices, supply chain process including procurement and matters that would not require any revision to the financial statements disclosed by the listed entity.
4. The same is in line with SEBI FAQs dated November 27, 2020 on Disclosure of Information Related to Forensic Audit of Listed Entities.
Notes:
Remember Satyam Computers’ accounting fraud?
If such forensic audits were disclosed earlier, investors could have avoided massive losses
8. Regulatory Actions against Companies
SEBI fined **Reliance Industries ₹447 crore** for unfair trading in the Reliance Petroleum case.
Amendment Language
Action(s) initiated or orders passed by any regulatory, statutory, enforcement authority or judicial body against the listed entity or its directors, key managerial personnel, senior management, promoter or subsidiary, in relation to the listed entity.
Reference:
Clause 19 and 20 of Para A of Part A of Schedule III under Regulation 30
Keynotes:
1. Clause 19 and 20 of Para A of Part A of Schedule III may be price sensitive and thus included in the illustrative list in the definition of UPSI. They cover the following:
(a) search or seizure; or
(b) re-opening of accounts under section 130 of the Companies Act, 2013; or
(c) investigation under the provisions of Chapter XIV of the Companies Act, 2013;
As well as
a) suspension;
(b) imposition of fine or penalty;
(c) settlement of proceedings;
(d) debarment;
(e) disqualification;
(f) closure of operations;
(g) sanctions imposed;
(h) warning or caution; or
(i) any other similar action(s) by whatever name called.
2. The materiality guidelines for Sector regulator/ Enforcement authority and other Regulatory/ Statutory/ Enforcement/ Judicial/ Quasi-Judicial Authority will be applicable (Rs 1 lakh and Rs 10 lakhs respectively)
9. Key Contracts💡
Example:
If Zomato signs an exclusive 10-year deal with McDonald's for delivery services, it’s major news that affects its valuation.
Share price jumps?
Probably.
That’s why SEBI calls it UPSI
Amendment Language:
Inclusion of award or termination of order/contracts not in the normal course of business.
Reference:
Clause 4 of Para B of Part A of Schedule III under Regulation 30
Keynotes:
1. Events described in clause 4 of Para B of Part A of Schedule III i.e Awarding, bagging/ receiving, amendment or termination of awarded/bagged orders/contracts not in the normal course of business are expected to have a significant impact on the revenue and profitability of a company.
2. Given the potential to impact the financial performance of a company such events are thus included in the illustrative list in the definition of UPSI at Regulation 2(1)(n)(iv) of PIT Regulations.
10. Outcome of Litigations or Disputes
Amendment Language:
outcome of any litigation(s) or dispute(s) which may have an impact on the listed entity.
Reference:
Clause 8 of Para B of Part A of Schedule III under Regulation 30
Keynotes:
1. Initial order and pendency or any litigation is available in the public domain i.e. website of the judicial authority; hence this may not be price sensitive.
2. However, the outcome of such litigations or dispute may be price sensitive and thus included in the illustrative list in the definition of UPSI.
3. Example: If TCS wins a ₹10,000 crore patent lawsuit against Infosys.
11. Financial Guarantees & Indemnities
Amendment Language:
Giving of guarantees or indemnity or becoming a surety, by whatever named called, for any third party, by the Company not in the normal course of business;
Reference:
Clause 11 of Para B of Part A of Schedule III under Regulation 30
Keynotes:
1. Guarantees/indemnity / surety, etc. can be in the usual course of business.
2. Nonetheless there may be instances where such guarantees/indemnity / surety, etc. are not in normal course of business and have the potential to adversely impact the financials of the listed entity.
3. Thus, they may be price sensitive and are included in the illustrative list in the definition of UPSI.
12. Key Licenses & Regulatory Approvals
In 2019, SpiceJet faced temporary suspension of its international flight rights due to regulatory non-compliance.
🛑 If this happened today, SpiceJet must disclose it as UPSI immediately—because it affects revenue and stock price.
Amendment Language:
Granting, withdrawal, surrender, cancellation or suspension of key licenses or regulatory approvals.**Reference:**Clause 12 of Para B of Part A of Schedule III under Regulation 30
Keynotes:
The granting, withdrawal, or suspension of essential licenses or approvals should be disclosed as such events could significantly affect company operations.
I feel really proud for inclusion of resignation of Secretarial Auditor in UPSI definition, do you too?
13. Resignation of Statutory/Secretarial Auditors Now UPSI
When Paytm’s auditor resigned, the market reacted negatively, fearing financial instability.
Amendment Language:
Exclusion of superannuation or end of term, and inclusion of resignation of a Statutory Auditor or Secretarial Auditor
Reference:
Clause 7 of Para A of Part A of Schedule III under Regulation 30
Keynotes:
The resignation of a Statutory Auditor or Secretarial Auditor have been included in the illustrative list in the definition of UPSI.
Did you wonder….Why Did I Refer to SEBI (LODR) Regulations?
To determine whether an event enumerated in Regulation 2(1)(n) qualifies as unpublished price-sensitive information (UPSI), it is crucial to follow the materiality guidelines outlined in Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as follows:
1. Paragraph A of Part A of Schedule III.
2. Paragraph B of Part A of Schedule III.
Stricter Timelines for Structured Digital Database (SDD) Entries📌
Amendment to Regulation 3(5):
SEBI now mandates that any UPSI received from external sources (i.e., information not originating within the organization) must be recorded in the Structured Digital Database (SDD) within 2 calendar days of receipt.
💡Interpretation:-
This ensures timely logging of sensitive information,
- Prevents compliance gaps and insider trading risks.
- Companies must strengthen internal processes to meet this deadline and avoid compliance lapses.
Trading Window Relaxation for External UPSI⏳
📌Amendment to Schedule B, Clause 4(1):
The **trading window closure requirement will NOT apply to UPSI that does not originate from the Listed Company itself**.💡
Interpretation:
- This change removes unnecessary trading restrictions for employees and insiders when UPSI comes from external sources (e.g., regulatory bodies, third parties).
- However, companies must continue to assess the impact of such information on trading decisions before allowing transactions.
In the last year alone there were around:
📌 47+ amendments by MCA
📌 60+ circulars & notifications from SEBI
📌100+ case law rulings impacting corporate governanc.
That’s a lot to track.
However, already 2845+ Company Secretaries get them delivered to their inbox.
You too can join our Passionate CS Email Community with the link given below
If you found this article helpful, do share with others…..Your engagement motivates me to share more articles!
With warm regards,
Keep Smiling,
Saeed Shaikh