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CS Professional · IFSCA - Regulations, Listing and Compliances · Listing and Issuance of Securities

Meridian Pharma Ltd, listed in GIFT IFSC, has a director who holds unpublished price-sensitive information about an upcoming large contract loss. The director sells shares before the announcement. Which compliance concern is most directly raised?

The most direct concern is breach of insider trading prohibitions. A director trading while holding unpublished price-sensitive information about a contract loss gains an unfair advantage over other investors, which listed-entity regulations forbid. The other options do not arise from these facts.

  1. ABreach of insider trading prohibitions applicable to listed securitiesCorrect
  2. BBreach of the rule on minimum public shareholding
  3. CBreach of the rule on appointing a compliance officer
  4. DBreach of the requirement to hold annual general meetings

Explanation

Trading while in possession of unpublished price-sensitive information is the core insider trading violation. The facts do not raise public shareholding, compliance officer or AGM issues. The sale before announcement is what makes the conduct unlawful.

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