SEBI's FAQs on Designated Persons: Why Access, Not Title, Defines Who's Covered

Source: SEBI's Comprehensive FAQs on SEBI (PIT) Regulations, 2015, dated December 31, 2024 — Section I, "Designated Person and Immediate Relatives" (Q.48–Q.52).

Why this section matters

Getting the Designated Persons list right is the foundation everything else in your PIT compliance program sits on — pre-clearance, disclosures, trading window, contra-trade all key off it. This section addresses the questions that come up when the "who's on the list" question gets genuinely hard: support staff, group-company roles, post-resignation obligations, and the promoter group.

Q48 — Your obligations toward a resigned designated person don't end on their last working day

What SEBI clarifies: Information collection from a DP continues only through their date of service. But after resignation, the company/intermediary/fiduciary should keep making efforts to maintain the person's updated address and contact details for one year, and must preserve the data collected for five years overall.

What SEBI intends: A resigned employee can still be caught up in enforcement action for conduct during their tenure, and SEBI needs a realistic path to reach them. The one-year "best efforts" contact-tracking window (not indefinite) is a pragmatic compromise — it doesn't burden companies with permanently tracking every former DP, but it prevents the record from going cold the moment someone leaves.

Practical takeaway: Build an offboarding step into your HR/compliance handoff that specifically flags DPs for one year of continued contact-detail tracking, and confirm your document retention schedule keeps DP records for five years post-resignation, not just for the duration of employment.

Q49 — Support staff (IT, secretarial, finance) are in scope if they have UPSI access — seniority is not the test

What SEBI clarifies: Regulation 9(4) identifies designated persons by role, function, and the access that role provides to UPSI — not by seniority or professional designation alone. Regulation 9(4)(v) specifically calls out support staff (IT, secretarial, etc.) with UPSI access as designated persons.

What SEBI intends: This directly rebuts a common (and understandable) instinct to build the DP list around organizational hierarchy — managers and above. SEBI's answer is explicit that a systems administrator who can see UPSI in a shared drive is in scope, regardless of title. This mirrors the broader theme in Section A (Q3): access to UPSI, not organizational status, is the operative test throughout these regulations.

Practical takeaway: Audit your DP list against actual system/data access rights (who can open the M&A data room, who administers the financial reporting system, who has admin rights on the SDD itself), not against the org chart. IT and secretarial staff with broad system access are a common blind spot.

Q50 — Holding company executives can be DPs of the subsidiary too

A holding company's whole-time director/MD should be added as a designated person of the subsidiary if their role gives them access to the subsidiary's UPSI — the same access-based test from Q49 applied across group structure. If your group has a holding-subsidiary listed structure, check that your subsidiary's DP list isn't accidentally scoped only to the subsidiary's own management, missing group-level executives who see its UPSI.

Q51 — "All promoters" pulls in the promoter group too, if they have UPSI access

Regulation 9(4)(iii) names promoters (individuals or investment companies, for intermediaries/fiduciaries) as designated persons directly. But the FAQ clarifies that promoter group members are also brought into DP scope if they have UPSI access — extending the same access-based logic to the wider promoter group rather than treating "promoter" narrowly as only the named/primary promoter entity.

Q52 — Immediate relatives of DPs can trade derivatives when clear of UPSI

A designated person's immediate relatives can trade in the company's derivatives, provided they're not in possession of UPSI, and such trades are governed by the code of conduct like any other DP-linked trade. This is a straightforward confirmation that derivatives aren't off-limits to immediate relatives by default — the same UPSI-possession test applies as it would to a direct equity trade.

Bottom line for your compliance checklist

Add a formal one-year contact-tracking step for resigned DPs, and confirm five-year data retention for DP records post-resignation.
Re-audit your DP list based on actual UPSI system/data access, not job title or seniority — check IT and secretarial staff specifically.
In group structures, check whether holding-company executives with subsidiary UPSI access are on the subsidiary's DP list.
Extend DP status to promoter group members who have UPSI access, not just the named promoter entities.
Apply the same UPSI-possession test to immediate relatives' derivative trades as you would to their equity trades.

This article interprets SEBI's published FAQ for general informational purposes and reflects our reading of the source document 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, applicable circulars, or advice from a qualified professional. Readers should independently verify current requirements against SEBI's website before acting.