Form C under SEBI insider trading rules

Form C is the format an Indian listed company uses to report that one of its insiders traded. Under the SEBI (Prohibition of Insider Trading) Regulations, 2015, a promoter, a member of the promoter group, a designated person or a director who crosses a value threshold in a quarter tells the company, and the company tells the stock exchange. What lands on the exchange website is a Form C. This guide explains what triggers it, what it contains, and what it deliberately leaves out. It is not investment advice.

Not to be confused with the US crowdfunding form of the same letter: for that, see what is a Form C filing.

What triggers a Form C?

Regulation 7(2)(a) sets a value test, not a share test. Disclosure is due when the value of the securities traded, whether in one transaction or a series of transactions over any calendar quarter, aggregates to a traded value in excess of ten lakh rupees. The person discloses to the company within two trading days of the transaction.

The Explanation to Regulation 7(2)(b) then resets the meter. After a disclosure has been made, the next one falls due when transactions effected after that disclosure cross the threshold again, rather than on every subsequent trade.

Who has to disclose

Four categories are named in Regulation 7(2)(a): every promoter, member of the promoter group, designated person and director. Regulation 6(2) widens it, since disclosures by any of them must include trading by their immediate relatives and by any other person for whom they take trading decisions. The company then notifies the exchange within two trading days of receiving the disclosure or of becoming aware of the information.

Since SEBI's system-driven disclosure circulars, much of this is generated from depository and exchange data rather than typed by hand. See what are system-driven disclosures.

What is on a Form C

The form has two tables. The securities table runs to 15 columns and covers, in order: the person's name, PAN, CIN or DIN and address; their category; the type and number of securities held before the transaction with the percentage of shareholding; the securities acquired or disposed of, with number, value and transaction type; the holding after the transaction with its percentage; the from and to dates; the date of intimation to the company; the mode of acquisition or disposal; and the exchange where the trade was executed.

The transaction-type column is broader than buying and selling. It names purchase, sale, pledge, revocation and invocation, with an "others, please specify" option. A pledge row is a financing event, not a change in economic holding, which is the single most common misreading of the form. See what is promoter pledging.

The second table reports trading in derivatives on the company's securities: contract type, contract specifications, and buy and sell legs by notional value and number of units, where notional value for options is premium plus strike price.

What a Form C does not capture

Two carve-outs matter. SEBI's PIT FAQs state that the number of securities acquired or disposed beyond the threshold must be disclosed irrespective of the mode of acquisition, except bonus issuance and shares received pursuant to a scheme. And a transfer between two demat accounts of the same person is not trading, since beneficial ownership does not change, so it produces no disclosure. A holding that moves for either reason will not have a Form C behind it.

The form's own note adds that the value of a transaction excludes taxes, brokerage and other charges, and SEBI's FAQs say the market rate is the value to report.

For the current format itself, the operative document is SEBI circular SEBI/HO/ISD/ISD/CIR/P/2021/19 dated 9 February 2021, which revised Forms B to D after the regulations replaced "employee" with "designated person" and added members of the promoter group. To read a live disclosure column by column, see how to read a Form C disclosure, and for how it differs from the one-time form, see Form B vs Form C.

Flock reads Indian insider disclosures alongside shareholding patterns and US filings, and keeps each one dated and linked to its source. What the data means for your money is your call to make.