GSI Code of Conduct for Prevention of Insider Trading


The Securities & Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, was amended on 22nd February 2002 (hereinafter referred to as “Regulations”) in terms of which a Stock Broker is required, inter alia, to frame a Code of Conduct for Prevention of Insider Trading by Employees of a Stock Broker, including its Directors


In line with the said Regulations, the following Code of Conduct (hereinafter referred to as “the Code”) has been adopted by Gandhi Securities & Investment Pvt Ltd (hereinafter referred to as “GSI”), Member of the Stock Exchange, Mumbai


1      Director

1.1     GSI has a Compliance Officer reporting to the Managing Director

1.2     The Compliance Officer shall be responsible for setting forth Policies and Procedures and monitoring adherence to the Rules for the preservation of "Price Sensitive Information", pre-clearing of all Designated Employees and their Dependents Trades (directly or through respective Department heads as decided by the GSI), monitoring of Trades and the Implementation of the Code of Conduct under the overall Supervision of the Directors

1.3     The Compliance Officer shall also assist all the Employees / Directors in addressing any Clarifications regarding SEBI (Prohibition of Insider Trading) Regulations, 1992 and GSI’s Code

1.4     The Compliance Officer shall maintain a record of the Designated Employees and any Changes made in the List of Designated Employees


2      Prevention of “Price Sensitive Information”

2.1      Employees / Directors shall maintain the Confidentiality of all Price Sensitive Information. Employees / Directors must not pass on such Information directly or indirectly by way of making a Recommendation for the Purchase or Sale of Securities

2.2     Need to Know

2.2.1   Price Sensitive Information is to be handled on a "Need to Know" basis, ie Price Sensitive Information should be disclosed only to those within GSI, who need the Information to discharge their Duty and whose Possession of such Information will not give rise to a Conflict of Interest or Appearance of Misuse of the Information

2.3     Limited Access to Confidential Information

2.3.1   Files containing Confidential Information shall be kept Secure. Computer Files must have Adequate Security of Login and Password, etc

2.4      Chinese Wall

2.4.1   To prevent the Misuse of Confidential Information, GSI shall adopt a "Chinese Wall" Policy which separates those Areas of GSI, which routinely have access to Confidential Information, considered "Inside Areas" from those Areas which deal with Sale / Marketing / Investment Advise or other Departments providing Support Services, considered "Public Areas"

2.4.2   The Employees in the Inside Area shall not communicate any Price Sensitive Information to anyone in Public Area

2.4.3   The Employees in Inside Area may be physically segregated from Employees in Public Area

2.4.4     Demarcation of the various Departments as Inside Area may be implemented by GSI

2.4.5   In Exceptional Circumstances, Employees from the Public Areas may be brought "Over the Wall" and given Confidential Information on the basis of "Need to Know" Criteria, under Intimation to the Compliance Officer


3      Prevention of Misuse of Price Sensitive Information

3.1      Employees / Directors shall not use Price Sensitive Information to Buy or Sell Securities of any sort, whether for their Own Account, their Relative’s Account, GSI’s Account or a Client's Account. The following Trading Restrictions shall apply for Trading in Securities

3.2     Pre-clearance of Trades

3.2.1   All Directors / Designated Employees of GSI, who intend to deal in the Securities of the Client Company (above a Minimum Threshold Limit to be determined by GSI) shall pre-clear the Transactions as per the pre-dealing Procedure as described hereunder

3.3.2   An Application may be made in such form as GSI may specify in this regard, to the Compliance Officer indicating the Name and Estimated Number of Securities that the Designated Employee / Director intends to deal in, the Details as to the Depository with which he has a Security Account, the Details as to the Securities in such Depository Mode and such other Details as may be required by any rule made by GSI in this behalf

3.3.4   An Undertaking shall be executed in favor of GSI by such Designated Employee / Directors incorporating, inter alia, the following Clauses, as may be applicable

i That the designated Employee / Director does not have any Access or has not received any "Price Sensitive Information" upto the time of signing the Undertaking

ii That in case the designated employee / director/partner has access to or receives "Price Sensitive Information" after the signing of the undertaking but before the execution of the transaction he/she shall inform the Compliance officer of the change in his position and that he/she would completely refrain from dealing in the securities of the client company till the time such information becomes public.

iii That he / she has not contravened the Code of Conduct for prevention of Insider Trading as specified by GSI from time to time

          iv     That he / she has made a Full and True Disclosure in the matter


4      Restricted / Grey List

4.1     In order to monitor Chinese Wall Procedures and Trading in Client Securities based on Inside Information, GSI shall restrict Trading in certain Securities and designate such List as Restricted / Grey List

4.2      Security of a Listed Company shall be put on the Restricted / Grey List if GSI is handling any Assignment for the Listed Company or is preparing Appraisal Report or is handling Credit Rating Assignments and is Privy to Price Sensitive Information

4.3     Any Security, which is being purchased or sold or is being considered for Purchase or Sale by GSI on behalf of its Clients / Schemes of Mutual Funds, etc shall be put on the Restricted / Grey List

4.4     As the Restricted List itself is a Highly Confidential Information it shall not be communicated directly, or indirectly to anyone outside GSI. The Restricted List shall be maintained by Compliance Officer

4.5     When any Securities are on the Restricted List, Trading in these Securities by Designated Employees / Directors may blocked or may be disallowed at the time of pre-clearance


5    Other Restrictions

5.1     All Directors / Designated Employees shall execute their Order within One Week after the approval of pre-clearance is given. If the Order is not executed within One Week after Approval is given, the Employee / Director must pre-clear the Transaction again

5.2     All Directors / Designated Employees shall hold their Investments for a Minimum Period of 30 Days in order to be considered as being held for Investment Purposes

5.3     The Holding Period shall also apply to Purchases in the Primary Market (IPOs). In the case of IPOs, the Holding Period would commence when the Securities are actually allotted

5.4     In case the Sale of Securities is necessitated by Personal Emergency, the Holding Period may be waived by the Compliance Officer after recording in Writing his / her reasons in this regard

5.5      Analysts, if any, employed with GSI while preparing Research Reports of a Client Company(s) shall disclose their Share Holdings / Interest in such Company(s) to the Compliance Officer

5.6      Analysts, who prepare Research Report of a Listed Company shall not Trade in Securities of that Company for 30 Days from Preparation of such Report


6    Penalty for Contravention of the Code

6.1     Any Designated Employee / Director who trades in Securities or communicates any Information or counsels any Person Trading in Securities, in Contravention of the Code may be penalised and appropriate Action may be taken by GSI

6.2      Designated Employees / Directors of GSI, who violate the Code may also be subject to Disciplinary Action by the Company, which may include Wage Freeze, Suspension, etc

6.3     The Action by GSI shall not preclude SEBI from taking any Action in case of Violation of SEBI (Prohibition of Insider Trading) Regulations, 1992


7      Information to SEBI in case of Violation of SEBI (Prohibition of Insider Trading) Regulations

7.1     In case it is observed by GSI / it’s Compliance Officer that there has been a Violation of these Regulations, SEBI shall be informed by GSI


8    Listed Intermediaries to comply with both Part A and B of Schedule I

8.1     The Intermediaries such as Credit Rating Agencies, Asset Management Companies, or Broking Companies etc whose Securities are listed in Recognised Stock Exchange shall comply with both Part A and Part B of this Schedule in respect of its Own Securities and Client’s Securities


By Order of the Board of Directors of

Gandhi Securities & Investment Pvt Ltd (GSI)




Ketan D Gandhi

Compliance Officer



Place     Mumbai


Date     25.02.2002