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Code of Conduct
To Regulate, Monitor and Report Trading by Insiders as per
SEBI (Prohibition of Insider Trading) Regulations, 2015
(“SEBI Code”)
CITICORP FINANCE INDIA LIMITED
OWNER:
India Compliance
ISSUE DATE:
MAY 15, 2015
VERSION:
1.0
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Modified date: 17-Feb-2016
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OBJECTIVE:
SEBI has notified the SEBI (PROHIBITION OF INSIDER TRADING) REGULATIONS, 2015,
hereinafter referred to as the "Regulations" that places restrictions on communication of
Unpublished Price Sensitive Information (“UPSI”), and trading in securities, by Insiders.
Regulation 9 (1) of the Regulations require the board of directors of listed companies and
market intermediaries to formulate a SEBI Code to regulate, monitor and report trading in
securities by its employees and other Connected Persons towards achieving compliance
with these Regulations. This SEBI Code has been framed pursuant to the Regulations
(“SEBI Code”).
APPLICABILITY:
The SEBI Code will be applicable to all employees of Citicorp Finance India Ltd (“CFIL”) and
Connected Persons, in order to achieve compliance with the Regulations. The SEBI Code
should be read in conjunction with Citi’s Code of Conduct, Citi Insider Trading Policy,
Global Chinese Wall Policy and Procedures, Employee Personal trading and Investment
Policy.
EFFECTIVE DATE:
The Regulations and the SEBI Code under the policy is effective from May 15, 2015.
DEFINITIONS:
Capitalised terms used in this SEBI Code, but not otherwise defined herein, shall have the
same meaning as given to them in Regulation 2 of Chapter I of the Regulations. Please refer
Annexure I for a list of such definitions.
RESTRICTIONS ON COMMUNICATION, PROCUREMENT OF AND ALLOWING
ACCESS TO UNPUBLISHED PRICE SENSITIVE INFORMATION:
CFIL employees and Connected Persons shall not communicate, provide, or allow access to
any UPSI relating to a company or Securities listed or proposed to be listed, to any person
including other Insiders, except where such communication is in furtherance of legitimate
purposes, performance of duties or discharge of legal obligations. CFIL employees and
Connected Persons shall not procure from, or cause the communication by, any Insider of
UPSI, relating to a company or Securities listed or proposed to be listed, except in
furtherance of legitimate purposes, performance of duties or discharge of legal obligations.
WALL CROSSING POLICIES AND PROCEDURES:
Citi maintains information barriers, which consists of policies and procedures designed to
prevent the misuse of potentially material and non-public information. Such policies and
procedures distinguish between employees or departments within Citi that have access to
potentially material and non-public information, also known as “material non-public price
sensitive information” (“MNPI”) or UPSI in the regular course of business (“Private-Side
Employees”) and employees or departments that have access only to publicly available
information in the regular course of business (“Public-Side Employees”).
Any sharing of UPSI or MNPI between Private-Side and Public-Side employees is not
permitted, without approval from Compliance and will be subject to ‘wall crossing’
procedures laid out in the Citi Global Wall Crossing Policy and Procedures.
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PERSONAL TRADING AND PRE-CLEARANCE OF TRADES:
Citi employees and their Immediate Relatives (“Covered Persons”) are prohibited from
trading in securities, including, but not limited to, equity securities, convertible securities,
corporate debt, derivatives and single stock futures whilst in possession of MNPI/UPSI. This
prohibition applies to trading in all Securities, whilst in possession of MNPI/UPSI.
Citi follows Employee Personal Trading and Investment Policy and Asia Pacific Procedure to
the Citi Employee Personal Trading and Investment Policy in this regard (“Citi ETP”) to
establish a framework within which the Covered Persons must conduct their personal
investment and trading activities in securities, in order to avoid conflicts of interest or the
appearance of impropriety. All CFIL employees have to ensure strict adherence to the same.
All Covered Persons, who intend to deal in the Securities, may do so only after obtaining
pre-clearance from the compliance department, as prescribed in the Citi ETP.
In addition to the restrictions placed under the Citi ETP and other policies of Citi, the
Regulations also require CFIL to designate certain employees as “Designated Persons”
based on their functional responsibilities and access to UPSI. Accordingly, all Private-Side
Employees of CFIL will be considered as Designated Persons1. Designated Persons shall
not trade in Securities of CFIL. Exceptions to the same may be granted by Compliance
and these trades will be subject to the following additional restrictions, in addition to
Citi ETP, in respect of trades in Securities of CFIL that they undertake in their Covered
accounts:
1. No contra trade within in six months: – Designated Persons who are permitted by
the compliance department to trade in CFIL Securities, shall not execute a Contra
Trade within six months from the date of the last trade approval to trade, whichever is
later. (Contra Trade would mean buy within 6 month of a sale OR sale within 6
months of a buy.)
Provided that the compliance department may grant relaxation from the contra trade
restrictions on an exception basis for reasons to be recorded in writing, provided that
such relaxation does not violate these Regulations.
In the event a Contra Trade gets executed, inadvertently or otherwise, in violation of
this restriction, the profits from such trade shall be disgorged, as provided in the
Regulations, and shall be remitted to the SEBI for credit to the Investor Protection
and Education Fund administered by the SEBI.
2. In addition, the Designated Persons who are Connected Persons in relation to a
particular company may not trade in the stock of such company when the trading
window announced by the company (if any) is closed.
FORMAT AND REPORTING:
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“Designated persons" would mean the employees of the business / function of CFIL, which have
been designated as the Private Side staff by Compliance of the Firm. This would include Corporate
Credit Risk, Legal, Compliance, Finance, Board members and such other departments / employees
designated as Private Side by Compliance.
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DESIGNATED PERSON:
In addition to the requirement of disclosing “covered accounts” as described in the Citi
ETP, Designated Persons will be required to report the following items to the Compliance
department.
a. Declare their level of holdings in Securities (excluding units in mutual funds) at
the time of joining Citi, and, thereafter, as and when required by the Compliance
department.
b. Promptly report to the Compliance department reasons for not trading in
Securities after obtaining/ securing pre-clearance from compliance to trade.
c. Trade through a Citi broker chosen by Citi or a preferred stock-broker permitted
by Citi. The employees may also be required to submit statement of transactions
and / or holding statements (in demat form) from time to time, as may be required
by Compliance.
d. Formats, as prescribed by Compliance, shall be used for pre-clearance and for
the other reports.
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2. ADDITIONAL DISCLOSURES BY KEY MANAGERIAL PERSONNEL AND DIRECTOR
ON THE BOARD
Initial Disclosures.
Promoters, Key managerial personnel and directors of the company are required
to disclose his/her holding of securities of the company as on the date of these
regulations taking effect, to the company within thirty days of these regulations
taking effect;
Further, on appointment as a Promoter, key managerial personnel or a director of
the company disclosure of the holding of securities of the company as on the
date of appointment to the company within seven days of such appointment.
Continual Disclosures.
Every promoter, employee and director is required to seek prior approval from
Compliance in the designated formats before trading in securities of CFIL (buy or
sell);
The company in turn shall notify the particulars of such trading to the stock
exchange on which the said securities are listed within two trading days of receipt
of the disclosure or from becoming aware of such information.
Disclosures by other connected persons.
2 Key Managerial Personnel as defined under Companies Act, 2013 clause 203
comprise of Managing Director, or Chief Executive Officer ; Whole time Director,
Company Secretary; Chief Financial Officer and any other officer as may be defined
by Compliance
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CFIL may, at its discretion require any other connected person or class of
connected persons to make disclosures of holdings and trading in securities of
the company in such form and at such frequency as may be determined by the
company in order to monitor compliance with these regulations.
The aforementioned disclosures are required to be made in the formats provided
in Annexure II.
8. Penalty:
CFIL may take such action against any CFIL employee who trades in Securities, or
communicates any MNPI / UPSI, in contravention of its Policies and this SEBI Code as may
be deemed appropriate, including, but not limited to, policy reminder, warning, wage-freeze,
suspension or termination. In addition to such actions, CFIL may also report such violations
to the SEBI.
9. General:
The decision of the Board of Directors of CFIL (“BOD”) or its committee or delegated
persons, with regard to any or all matters relating to this SEBI Code shall be final and
binding on CFIL employees. The BOD or its delegates will modify, amend or replace this
SEBI Code in part or in full as may be deemed fit from time to time in its absolute discretion.
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ANNEXURE - 1
DEFINITIONS AS GIVEN IN REGULATION 2 (1) OF THE REGULATIONS:
(a) “Act” means the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(b) “Board” means the Securities and Exchange Board of India;
(c) “compliance officer” means any senior officer, designated so and reporting to the board of
directors or head of the organization in case board is not there, who is financially literate and
is capable of appreciating requirements for legal and regulatory compliance under these
regulations and who shall be responsible for compliance of policies, procedures,
maintenance of records, monitoring adherence to the rules for the preservation of
unpublished price sensitive information, monitoring of trades and the implementation of the
codes specified in these regulations under the overall supervision of the board of directors of
the listed company or the head of an organization, as the case may be;
(d) "connected person" means,(i) any person who is or has during the six months prior to the concerned act been
associated with a company, directly or indirectly, in any capacity including by reason
of frequent communication with its officers or by being in any contractual, fiduciary or
employment relationship or by being a director, officer or an employee of the
company or holds any position including a professional or business relationship
between himself and the company whether temporary or permanent, that allows such
person, directly or indirectly, access to unpublished price sensitive information or is
reasonably expected to allow such access.
(ii) Without prejudice to the generality of the foregoing, the persons falling within the
following categories shall be deemed to be connected persons unless the contrary is
established, (a). an immediate relative of connected persons specified in clause (i); or
(b). a holding company or associate company or subsidiary company; or
(c). an intermediary as specified in section 12 of the Act or an employee or
director thereof; or
(d). an investment company, trustee company, asset management company or an
employee or director thereof; or
(e). an official of a stock exchange or of clearing house or corporation; or
(f). a member of board of trustees of a mutual fund or a member of the board of
directors of the asset management company of a mutual fund or is an employee
thereof; or
(g). a member of the board of directors or an employee, of a public financial
institution as defined in section 2 (72) of the Companies Act, 2013; or
(h). an official or an employee of a self-regulatory organization recognised or
authorized by the Board; or
(i). a banker of the company; or
(j). a concern, firm, trust, Hindu undivided family, company or association of persons
wherein a director of a company or his immediate relative or banker of the company,
has more than ten per cent of the holding or interest;
(e) "generally available information" means information that is accessible to the public on a
non-discriminatory basis;
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(f) “immediate relative” means a spouse of a person, and includes parent, sibling, and child
of such person or of the spouse, any of whom is either dependent financially on such
person, or consults such person in taking decisions relating to trading in securities;
(g) "insider" means any person who is: i) a connected person; or ii) in possession of or
having access to unpublished price sensitive information;
(h) "promoter" shall have the meaning assigned to it under the Securities and Exchange
Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 or any
modification thereof;
(i) "securities" shall have the meaning assigned to it under the Securities Contracts
(Regulation) Act, 1956 (42 of 1956) or any modification thereof except units of a mutual
fund;
(j) "specified" means specified by the Board in writing;
(k) “takeover regulations” means the Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulations, 2011 and any amendments thereto;
(l) "trading" means and includes subscribing, buying, selling, dealing, or agreeing to
subscribe, buy, sell, deal in any securities, and "trade" shall be construed accordingly ;
(m) “trading day” means a day on which the recognized stock exchanges are open for
trading;
(n) "unpublished price sensitive information" means any information, relating to a company
or its securities, directly or indirectly, that is not generally available which upon becoming
generally available, is likely to materially affect the price of the securities and shall, ordinarily
including but not restricted to, information relating to the following: –(i) financial results; (ii)
dividends; (iii) change in capital structure; (iv) mergers, de-mergers, acquisitions, delistings,
disposals and expansion of business and such other transactions; (v) changes in key
managerial personnel; and (vi) material events in accordance with the listing agreement.
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