Designated Person

What "designated person" means — a list the board must draw up

Most SEBI concepts begin life as definitions in Regulation 2. "Designated person" does not. Regulation 2(1) defines the insider, the connected person, UPSI and the immediate relative — and then stops. The designated person appears later, in Chapter IV, because the status is not a fact about a person but a decision an organisation must take. Regulation 9(1) obliges every listed company to formulate a code of conduct (on the minimum standards of Schedule B) "to regulate, monitor and report trading by its designated persons and immediate relatives of designated persons"; intermediaries follow Schedule C, and fiduciaries — auditors, law firms, consultants, banks and others who handle a listed company's UPSI — formulate Schedule C codes for their own designated persons under Regulation 9(2). Regulation 9(4) then says who draws the list and by what test:

Three consequences follow. Designation turns on exposure, not job title alone — a junior employee who compiles results can be designated while a senior executive in an unrelated business need not be. The list is the board's, made with the compliance officer, not the compliance officer's alone. And the status has a statutory backstop: Regulation 9A(2)(a) requires the internal-control system to ensure that all employees who have access to UPSI are identified as designated persons — anyone the work exposes must end up on the list.

Who must be designated — the Regulation 9(4) inclusions

Regulation 9(4) does not leave the list wholly to judgment. After the role-and-access test, it says the designated persons shall include:

In practice — and this is practice, not text — the functional-role limb is where the finance and accounts team, the company secretarial and legal teams, investor relations, the CEO's and CFO's offices, and staff who prepare results, board papers, fund-raising or M&A files are picked up, together with anyone regularly in the chain through which a specific item of UPSI travels. A person can also move on and off the list as roles change; the specification is the board's continuing act, and the Audit Committee must review the compliance system, this identification included, at least once a financial year (Regulation 9A(4)).

Designated person, connected person, insider — three different ideas

The three terms are used interchangeably in office conversation and mean different things in law. The designated-person list is the narrowest and the only one the company writes itself; the other two classifications apply by operation of law, listed or not.

So a designated person is an insider the company has named in advance. The converse does not hold: a consultant who receives UPSI for a transaction becomes an insider (Regulation 3(2B)) and very likely a connected person, without ever appearing on the company's designated-person list — which is exactly why Regulation 7(3) lets the company call for disclosures from other connected persons too.

The code of conduct: what designation actually imposes

Designation matters because the Schedule B minimum standards (Schedule C for intermediaries and fiduciaries) attach a control to almost every trade a designated person — and their immediate relatives — might make.

The trading window (clause 4). A "notional trading window" monitors designated persons' trading. The compliance officer closes it whenever a designated person or a class of them can reasonably be expected to possess UPSI, for the securities that UPSI relates to; while it is closed, designated persons and their immediate relatives shall not trade. One closure is automatic and calendared: the trading restriction period runs from the end of every quarter till 48 hours after the declaration of financial results (clause 4(2)). The window reopens when the compliance officer decides the information has become generally available and capable of being assimilated by the market — in no event earlier than 48 hours after it becomes generally available (clause 5). Since 10 June 2025 there is one relaxation: for UPSI not emanating from within the listed company, the trading window may not be closed (proviso to clause 4(1), inserted by the 2025 amendment) — a company need not freeze its designated persons over price-sensitive news that originates outside it. Clause 4(3) also lifts the window restriction for defined transactions — inter-se off-market transfers between equally informed insiders, block deals, statutory obligations, ESOP exercises, trades under an approved trading plan, bona fide pledges with pre-clearance, and transactions executed under other SEBI regulations such as rights issues, buy-back tenders and open offers.

Pre-clearance (clauses 6, 8 and 9). When the window is open, a designated person's trades need the compliance officer's pre-clearance if the value of the proposed trades is above such thresholds as the board of directors may stipulate. Note what the Schedule does not do: it fixes no amount. Companies commonly stipulate a figure in their codes, but that figure is the company's choice, not SEBI's rule — and it is not to be confused with the ₹10 lakh in Regulation 7, which is a disclosure trigger (below). Before approving, the compliance officer may require a declaration that the applicant is not in possession of UPSI (clause 8), and a pre-cleared trade must be executed within the code's timeframe, which cannot exceed seven trading days, or fresh pre-clearance is needed (clause 9).

The contra-trade bar (clause 10). The code must specify a period — in any event not less than six months — within which a designated person who has been permitted to trade cannot execute a contra trade (the opposite side of the earlier trade). The compliance officer may relax the bar for reasons recorded in writing, so long as the relaxation does not violate the Regulations; a contra trade executed in violation means the profits are disgorged to SEBI for credit to the Investor Protection and Education Fund. The bar does not apply to trades made by exercising stock options.

Personal disclosures to the company (clause 14). Every designated person must disclose to the company, annually and whenever the information changes, the names and PAN (or other authorised identifier) of their immediate relatives and of persons with whom they share a material financial relationship, and the phone, mobile and cell numbers they use; the names of their educational institutions and past employers are disclosed once. This is the raw material the compliance officer uses to spot trades routed through family and associates.

Disclosures under Regulation 7 — where the ₹10 lakh actually lives

Regulation 7 is a disclosure code addressed to named categories, and the designated person is one of them. Under Regulation 7(2)(a), every promoter, member of the promoter group, designated person and director must disclose to the company the number of securities acquired or disposed of within two trading days of the transaction, if the value traded — in one transaction or a series over any calendar quarter — aggregates to more than ₹10 lakh (or such other value as SEBI specifies). Once a disclosure is made, the count restarts: the next disclosure falls due when later transactions again cross the threshold. The company, in turn, notifies the particulars to the stock exchange within two trading days of receiving the disclosure or becoming aware of the information (Regulation 7(2)(b)). Two riders matter for designated persons. First, disclosures under Chapter III cover not only the person's own trades but those of their immediate relatives and of any person for whom they take trading decisions, and they cover derivatives of the securities as well (Regulation 6(2)–(3)). Second, the initial-disclosure limb, Regulation 7(1)(b) — holdings disclosed within seven days — is triggered by appointment as a KMP or director, or by becoming a promoter or promoter-group member; becoming a designated person is not, by itself, a Regulation 7(1) event, so a new designated person's holding disclosure flows from the code of conduct, not from Regulation 7(1).

Trading plans: an option to use, not a duty to obey

The live version of this page once told readers that designated persons must "comply with trading plan requirements". There is no such requirement, and the correction matters because the trading plan is one of the few routes by which a person perpetually close to UPSI can trade at all. Regulation 5(1) entitles any insider — not only designated persons — to formulate a trading plan and present it to the compliance officer for approval and public disclosure; the Regulation's own Note calls it "an option to persons who may be perpetually in possession of unpublished price sensitive information" to trade in a compliant manner, and Regulation 4(1)'s proviso, clause (vi), treats trades under such a plan as an exonerating circumstance. The conditions, as they stand after the September 2024 rewrite of Regulation 5, are these: trading cannot begin earlier than 120 calendar days from the plan's public disclosure (Regulation 5(2)(i)); the plan must set out, for each trade, the value or number of securities, the nature of the trade, and a specific date or a period of not more than five consecutive trading days, with an optional price limit (up to 20% above the previous closing price for a buy, 20% below for a sell); it must not overlap another plan already in existence, and must not entail trading for market abuse. The compliance officer reviews the plan, may seek undertakings, and must approve or reject it within two trading days of receipt and notify an approved plan to the stock exchanges (Regulation 5(5)). Once approved, the plan is irrevocable and must be implemented; the insider cannot trade outside it or deviate from it except on permanent incapacity, bankruptcy or operation of law — and implementation cannot even begin if UPSI held when the plan was formulated is still unpublished. Two privileges make the plan workable: trades under an approved plan need no pre-clearance, and the trading-window norms do not apply to them (Regulation 5(3), provisos). What a plan is not: nobody is obliged to adopt one, adopting one is not a substitute for the code of conduct, and — a point older guides still get wrong — the former conditions that a plan run for at least twelve months and avoid the results period were omitted in 2024 and are no longer law.

The paper trail: lists, and the structured digital database

Designation sits inside a records system designed so that, if UPSI leaks, SEBI can reconstruct who knew what and when. The board's Regulation 9(4) specification creates the list of designated persons. Regulation 9A(2)(d) separately requires lists of all employees and other persons with whom UPSI is shared, backed by confidentiality agreements or notices. And Regulation 3(5) requires a structured digital database — maintained internally, never outsourced, with time-stamping and audit trails — recording the nature of the UPSI and the names of the persons who shared it and the persons with whom it was shared, with PAN or other authorised identifier; information that originates outside the organisation may be entered within two calendar days of receipt (2025 proviso), and the database must be preserved for at least eight years after the relevant transactions complete, and until any SEBI investigation or enforcement proceeding ends (Regulation 3(6)). A designated person should assume every receipt of UPSI, and every share onward, is being entered against their name.

If a designated person breaks the rules

Consequences stack. Inside the company, the code must itself stipulate sanctions and disciplinary action — wage freeze, suspension, recovery — for contraventions, with amounts collected remitted to SEBI's Investor Protection and Education Fund (Schedule B, clause 12); a violating contra trade's profits are disgorged the same way (clause 10); and a violation of the Regulations observed by the company must be promptly informed to the stock exchanges (clause 13). Above the company sits Regulation 10: any contravention of the Regulations "shall be dealt with by the Board in accordance with the Act". For insider trading proper, section 15G of the SEBI Act, 1992 sets the penalty at not less than ₹10 lakh, extending to ₹25 crore or three times the profits made out of the insider trading, whichever is higher — and Regulation 4's Explanation means a trade executed while in possession of UPSI is presumed to have been motivated by it, leaving the insider to prove an exonerating circumstance. Residual contraventions of the Act, rules or regulations for which no separate penalty is provided attract the penalty under section 15HB, which extends to ₹1 crore.

This page explains the designated-person framework under the SEBI (Prohibition of Insider Trading) Regulations, 2015 for study and compliance reference, in the form in force after the SEBI (PIT) (Amendment) Regulations, 2025 (in force from 10 June 2025) and the Regulation 5 rewrite of September 2024. Thresholds a company's own code stipulates — pre-clearance values, the exact contra-trade period beyond the six-month floor — vary from company to company. It is not legal advice for a specific trade or designation.