System Driven Disclosure (SDD) in the securities market is an automated mechanism that ensures timely and accurate reporting of transactions and changes in shareholding. This not only reduces manual reporting and provides ease of doing business but also enhances transparency and timely disclosures of information about transactions being carried out by promoters, members of promoter groups, directors, designated persons and acquirers.
SEBI regulations viz; Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 and Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 have specified the disclosure requirements with respect to transactions carried out by promoters, members of promoter groups, directors, designated persons and acquirer. The purpose of disclosure is to bring transparency and promote orderly conduct in the market. For system driven disclosures, SEBI has advised listed companies to appoint a depository as its designated depository and provide information including PAN of promoters, members of promoter group, directors and designated persons to designated depository.
With a view to facilitate listed companies to comply with SEBI guidelines, NSDL has enabled listed companies to appoint NSDL as its designated depository and provide information including PAN of promoters, members of promoter group, directors and designated persons through issuer services portal.
NSDL offers a comprehensive range of services to issuer companies through the vast network of over 260 DPs/Business Partners. These services include monitoring of Foreign Investment Limits, Electronic Bidding Platform and handling of corporate actions. These services help to bring in efficiency and transparency in their operations, ensuring seamless compliance with regulatory requirements and facilitating effective engagement with the financial market.
The SEBI regulations are applicable to all companies listed on nationwide stock exchanges, namely NSE, BSE and MSE.
Company wishing to appoint NSDL as its designated depository and provide required data, will need to register itself with NSDL. Post registration, the authorised user can designate NSDL after login to NSDL portal. Through the portal, companies can submit essential information about promoters, promoter group members, directors and designated persons.
No, listed companies are mandated to select one depository as their designated depository. They need to provide information, including PAN details of promoters, members of the promoter group, directors and designated persons exclusively to the designated depository.
Any updates in this information must be reported on the same day by the listed company.
Any updates in this information must be reported on the same day by the listed company.
PAN is required in all cases except those which are exempted. In such cases, BO ID details of demat accounts need to be provided.
Entities exempt from taxes or filing tax returns in India and investors in the state of Sikkim are considered PAN exempt.
For individuals or entities without PAN or Demat Account, such as foreign nationals serving as directors or designated persons in listed companies, companies are not required to provide their details. However, if these individuals or entities later obtain PAN, the company can provide the details to the designated depository at that time.
The issuer must select one of the depositories as its designated depository following the guidelines specified by the depositories.
The definition of the promoter and promoter group can be found in Regulation 2(oo) and 2(pp) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
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