SEBI Extended Automated Trading Window Framework to Immediate Relatives of DPs

Current Context: On April 21, 2025, SEBI (Securities and Exchange Board of India) extended its Automated Trading Window Framework to include immediate relatives of Designated Persons (DPs) in listed companies.

• This framework aims to curb insider trading, ensuring ethical trading practices during sensitive periods like announcements of financial results.
• Immediate relatives include spouses, parents, siblings, and children who are either financially dependent on DPs or consult them on trading decisions.

SEBI will implement this framework in two phases:

• Phase 1: Applies to the top 500 listed companies starting July 1, 2025.
• Phase 2: Expands to all listed companies by October 1, 2025.

By extending these restrictions, SEBI strengthens measures to maintain transparency and fairness in stock trading.

Question:

Q.1 What is the primary objective of SEBI’s extension of the Automated Trading Window Framework to immediate relatives of Designated Persons (DPs)?
a) To encourage family trading in stock markets
b) To enhance liquidity in the market
c) To curb insider trading and promote ethical practices
d) To attract foreign investments

Answer: c) SEBI’s move aims to prevent misuse of unpublished price-sensitive information by those closely related to DPs, ensuring fair and ethical trading practices.