SEBI's 2025 PIT Amendment: UPSI Expands to 16 Categories, Plus SDD and Trading Window Changes

Source: Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2025 — SEBI/LAD-NRO/GN/2025/235, notified in the Gazette of India on March 11, 2025, coming into force on the ninetieth day after publication (i.e., June 9, 2025). This is the most substantive change to the PIT Regulations since the Comprehensive FAQ was issued, and it directly updates two of the topics we've already covered: the Structured Digital Database and Trading Window Closure.

Why this amendment matters

Until this amendment, the PIT Regulations' list of deemed-UPSI events (Regulation 2(1)(n)) was noticeably shorter than the kind of information that actually moves stock prices in practice — things like fraud disclosures, forensic audits, licence cancellations, or a company standing surety for a third party weren't explicitly named, even though they're exactly the sort of information insiders might trade on. This amendment closes that gap by more than doubling the list, while also addressing a structural problem the Comprehensive FAQ had already flagged: what do you do about UPSI that originates outside the company, which the company's own SDD and trading-window machinery weren't really designed around?

Change 1: The UPSI list expands from roughly five categories to sixteen

Regulation 2(1)(n) previously ran through a shorter list ending around "changes in key managerial personnel." The amendment inserts eleven new sub-clauses (vi through xvi), plus a refinement of two existing ones. The new events are worth reading as a full list, because each is now presumptively UPSI once it exists and is not yet public:

• Change in credit rating(s) — explicitly excluding ESG ratings
• Fund raising proposed to be undertaken
• Agreements (however described) that may impact management or control of the company
• Fraud or defaults by the company, its promoter, director, KMP, or subsidiary — or arrest of a KMP, promoter, or director, in India or abroad
• Resolution plans, restructuring, or one-time settlement of bank/FI borrowings
• Admission of a winding-up petition, admission of a CIRP application against the company, or approval/rejection of a resolution plan under the IBC
• Initiation of a forensic audit (for mis-statement, misappropriation, or diversion of funds) and receipt of the final forensic audit report
• Actions initiated or orders passed by any regulatory, statutory, enforcement, or judicial body — in India or abroad — against the company, its directors, KMPs, promoter, or subsidiary
• Outcome of litigation/disputes that may impact the company
• Guarantees, indemnities, or the company standing surety for a third party, outside the normal course of business
• Grant, withdrawal, surrender, cancellation, or suspension of key licenses or regulatory approvals

Two existing sub-clauses were also refined: the disposal/expansion category now explicitly includes "award or termination of order/contracts not in the normal course of business," and the KMP-change category now excludes changes due to superannuation or end of term, while separately adding resignation of a statutory or secretarial auditor as its own trigger.

What SEBI intends: Two accompanying explanations matter as much as the list itself. Explanation 1 pins "fraud" and "default" to existing definitions in the PFUTP Regulations, 2003 and LODR Schedule III respectively — so you're not left guessing what those terms mean here; you cross-reference definitions your company likely already applies for other compliance purposes. Explanation 2 ties materiality for all sixteen categories back to LODR Schedule III's existing materiality framework (Paragraphs A and B of Part A) — meaning your existing LODR materiality policy is now doing double duty for PIT purposes too.

Practical takeaway: Your UPSI identification checklist and your list of "events that trigger trading window closure" both need a full rewrite against these sixteen categories, not just an addendum. Map each new category to a specific internal owner (e.g., forensic audit initiation might sit with internal audit/legal, licence status with the regulatory affairs team) so someone is actually watching for these triggers in real time, rather than the compliance officer having to independently notice a forensic audit has started somewhere in the organization.

Change 2: A firm 2-calendar-day deadline for externally-sourced UPSI in the SDD

A new proviso to Regulation 3(5) states that information not emanating from within the organisation may be entered into the Structured Digital Database not later than 2 calendar days from receipt. Read this alongside our earlier SDD article: the FAQ had already established that internal and external UPSI sharing both need SDD entries; this amendment adds a specific outer time limit for the external-origin case — for example, UPSI a company receives from an acquisition counterparty, a lender, or another company in a joint venture.

Practical takeaway: Build a "date of receipt" field into your SDD intake process specifically for externally-sourced UPSI, with a 2-day SLA alert, distinct from internally-generated UPSI which doesn't carry this specific statutory clock.

Change 3: Trading window need not close for externally-sourced UPSI

A new proviso to Schedule B, Clause 4 states that for UPSI not emanating from within the listed company, the trading window may not be closed. Recall from our Trading Window Closure article that the FAQ (pre-amendment) took an unqualified "yes, close for every UPSI" position (Q33). This amendment carves out a specific, narrower exception: only for UPSI whose source is external to the company.

What SEBI intends: The rationale is practical rather than about lowering the bar on insider trading risk. Company-wide trading window closures are a blunt, costly instrument — every designated person's trading freezes, regardless of whether they actually know about (or could plausibly access) UPSI that originated entirely outside the company's own systems, e.g. in a counterparty's data room. Making closure discretionary rather than mandatory for that narrower category avoids closing the window company-wide for information the bulk of your designated persons may have zero practical way of accessing.

Practical takeaway: This is "may not be closed," not "shall not be closed" — it's discretionary relief, not a prohibition on closing the window. Your compliance officer still decides case-by-case whether closure is warranted; document the reasoning either way (particularly if you choose not to close the window for an externally-sourced UPSI event) since this is a judgment call SEBI could later scrutinize.

Bottom line for your compliance checklist

• Rebuild your UPSI-event checklist against all sixteen categories, with a named internal owner per category who can flag the trigger in real time.
• Cross-reference your existing LODR materiality policy and PFUTP/LODR "fraud"/"default" definitions rather than drafting new PIT-specific ones from scratch.
• Add a distinct 2-calendar-day SLA for SDD entry of externally-sourced UPSI, tracked separately from internal UPSI.
• Treat the trading-window carve-out for externally-sourced UPSI as discretionary relief, and document your compliance officer's reasoning whenever it's exercised.

This article interprets SEBI's published amendment regulation for general informational purposes and reflects our reading of the official Gazette notification as of the date of publication. It is not legal advice and should not be treated as a substitute for the actual text of the PIT Regulations or advice from a qualified professional. Readers should independently verify current requirements against SEBI's website before acting.