The Closure Trigger
The trading window must be closed when the compliance officer determines that designated persons or insiders can reasonably be expected to have possession of UPSI relating to the scheme. The determination should be recorded in writing, and the closure should be communicated to all designated persons and their immediate relatives.
The Closure Period
The closure period begins on the date determined by the compliance officer and ends not earlier than forty-eight hours after the UPSI becomes generally available. The compliance officer should maintain a register of the closure period, the persons covered, and the date of reopening.
The Exceptions
The PIT Regulations permit certain trades during the closure period: off-market inter-se transfers between insiders who were in possession of the same UPSI, and trades carried out in accordance with the block deal window mechanism. The compliance officer should verify that any proposed trade falls within the exceptions before granting permission.
The Pre-Clearance
Even during an open window, designated persons may need pre-clearance for trades above the prescribed threshold. The pre-clearance application should disclose the person’s holdings and the proposed trade. The compliance officer should maintain a register of pre-clearances and reject any application that is inconsistent with the PIT policy.
The Documentation
The file should contain: the closure notice; the register of designated persons; the reopening notice; the pre-clearance register; and the exception approvals. A scheme that proceeds without a documented trading window closure is exposed to a PIT enforcement action.
Call to Action: For trading window closure documentation, PIT policy review, or pre-clearance process design, contact office@anujdesaiassociates.com or 9619456656. Website: https://anujdesaiassociates.com. LinkedIn: linkedin.com/in/ca-anuj-desai-122547230.