Policy for Dealing with Conflict of Interest for Investment / Trading

 (Trading Policy) 

  

Revision Date	Version
September 22, 2021	8
February 03, 2021	7
April 01, 2020	6
March 01, 2019	5
May 28, 2018	4
June 19, 2017	3
July, 2015	2
February 26, 2015	1

A. Preamble:

a) This Document contains the policy, procedures and restrictions to manage and prevent Conflict of Interest in trading / investment by Acuité, its Access Persons and other employees.

b) Acuité and its Access Persons / Employees should ensure compliance with this Policy and also ensure compliance of:

i. The Securities and Exchange Board of India (Insider Trading) Regulations, 2015;

ii. The Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 and

iii. Other laws relevant to trading in securities.

c) This Policy shall cover transactions for purchase or sale of securities either individually or jointly or in the names of their dependents or as a member of a HUF.

B. Definitions:

a) Securities

Securities for the purpose of this Policy shall have the meaning assigned to it under the Securities Contracts (Regulation) Act, 1956. This Policy does not apply to Investments in Government Securities, Mutual Funds, gold, real estate, Government Savings Schemes, investments made through discretionary wealth management service providers, investments which are not in the nature of securities like life insurance policies, provident funds, etc.

b) Access Persons

Access Persons means officials of Acuité appointed as Chief Executive or by any other designation (such as Chief Executive Officer / Managing Director / Executive Director / Whole-Time Director / President), all Business Heads in the Credit Rating Division, all employees performing the function of Rating Analysts, all employees providing assistance to the Ratings Operations team, Heads of the Departments or divisions, Compliance team members, and the members of the Rating Committee of Acuité. The Compliance Officer will have the authority to include any other employee / official / consultant as Access Persons, based on the business / regulatory / other requirements.

c) Immediate Family & Dependents

Immediate family & dependents shall mean and include spouse, minor children, dependent parents, other dependents and any entity (including Hindu Undivided Family) or trust owned or controlled by the Employees / Access Persons or their Dependents.

C. Trading / Investment by Acuité:

Acuité shall ensure that there is no conflict of interest while making investment in any Securities. Acuité shall not make any investments in Securities issued by companies which have credit ratings outstanding from Acuité. No non-public and/or price - sensitive information about any company from its credit rating division shall be relied upon in its investment decision.

D. Securities Trading Approval Portal (STAMP):

With a view to facilitate the process of seeking approvals for transactions and making the disclosures under this Policy paperless and seamless, Acuité has developed an in-house trading and management portal called Securities Trading Approval Portal (hereinafter called the STAMP), through which Access Persons / Employees can comply with all the actions as required under the Policy.

E. Trading / Investment by Access Persons / Employees and their immediate family & dependents:

a) Disclosures

i. Within seven working days from the date of joining every Employee must submit to the Compliance Officer a Holding Statement of the Securities held by him/her and/or his/her immediate family & dependents, in the format given in the enclosed Annexure A.

ii. Thereafter, annually all the Employees including the Access Persons should submit his/her consolidated Statement of Holding of all securities (including the holding statements of their immediate family & dependents) as on 31st March every year, within 30 working days from the end of the financial year.

iii. As regards, the CEO, he/she shall submit the Holding Statement/s, as stated above, to the Compliance Officer who shall place the same before the Board of Directors for their noting at the ensuing Board Meeting.

iv. On completion of any and every transaction of Securities, all the Employees including Access Person shall upload the Transaction Statement on STAMP, within seven calendar days from the date of transaction for record. In respect of securities transactions in IPOs, Right Issues, Buy-back, etc., the Employees / Access Person shall upload the Transaction Statement on the Portal, within seven calendar days from the date of allotment of securities / receipt of communication of the transaction from the company/broker/R&TA/DP.

b) Prior Approval for Transactions

i. Every Access Person (including the CEO) is required to seek prior approval of the Compliance Officer for entering into a securities transaction (including those through initial public offerings (IPOs), corporate actions such as buy-back, rights issues, etc.) This includes all transactions of the Access Person and his/her immediate family & dependents. Normally, such prior approvals are to be sought through STAMP. However, in certain exceptional situations, the Compliance Officer may allow Access Person to seek prior written approval by submitting a request in duplicate, in the format given in the enclosed Annexure B.

ii. The Compliance Officer shall, obtain prior approval from the CEO for entering into a securities transaction.

iii. The Compliance Officer shall approve / reject the request raised by the Access Person through STAMP. However, in case of prior approval sought in writing through submission of Annexure B, the Compliance Officer shall convey the approval / disapproval, by returning to the Access Person, a duly signed duplicate copy of his/her request form.

iv. As regards the Compliance Officer, he/she shall obtain prior approval of the CEO by raising a request through STAMP or in exceptional situations by submitting a written request in duplicate in the format given in the enclosed Annexure B.

v. The CEO shall approve / reject the request raised by the Compliance Officer through STAMP or convey the approval / disapproval by returning to the Compliance Officer, a duly signed duplicate copy of his/her request form.

vi. On receipt of the approval, the order must be executed within seven calendar days from the date of approval. If the order is not executed within the above period of seven calendar days, the Access Person must seek prior approval for the transaction again.

vii. If the Access Person does not intend to utilize the approval already given, he/she should immediately inform the Compliance Officer of his/her decision to not utilize the given approval by updating the status as "Approval Not Utilized” on STAMP.

viii. Approvals granted herein shall be valid for seven calendar days from the date of approval but may be withdrawn earlier by the Compliance Officer, if the circumstances so warrant.

c) Restricted List

i. To prevent trading in the Securities of a rated client of Acuité based on insider information, Acuité shall put such companies on the Restricted List which will be systematically updated on STAMP.

ii. When a company is on the Restricted List, trading in Securities of that company by an Access Person shall not be allowed.

d) Other Restrictions

Analyst involved in the rating process shall not have ownership of the securities of the company they rate.

F. Members of the Rating Committee:

Members of the Rating Committee shall upfront disclose in writing their interest, if any, to the Compliance Officer in the Securities / instruments / facilities that are considered for rating by Acuité. Such member/s shall refrain from participating in such rating by Acuité..

G. Compliance, Violation:

a) Compliance of this policy is a condition of continuance of employment with Acuité. Any violation will be viewed seriously by Acuité and shall be the ground for disciplinary action. This may include imposition of a monetary penalty for continuing default / non-compliance and / or termination from service with or without notice, as deemed fit by Acuité..

b) Submission of the information as required under this Policy in no way authorizes or ratifies the transactions executed earlier by the Employees / Access Persons.

c) The information submitted by the Employees / Access Persons is for record and Acuité is not responsible if they contravene the provisions of the -

i. Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015

ii. Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003

iii. Any other circular/regulation/guideline issued by SEBI from time to time.

d) It is the policy of Acuité to proactively cooperate with all Regulators and Law Enforcement Agencies in their investigations / action against any Employee / Access Person of Acuité.

H. General:

a) If an Employee / Access Person needs any clarification, he/she should seek in writing such clarifications from the Compliance Officer by giving all necessary details.

b) The Management of Acuité reserves all rights to make necessary changes to this Policy and inform such changes in writing by a general circular / e-mail to all the Employees / Access Persons. Such changes shall automatically form part of this Policy and shall be binding on all the Employees / Access Persons.

c) All decisions taken by the Compliance Officer / CEO / Board of Directors shall be final and binding on all the Employees / Access Persons. In this regard, no correspondence shall be entertained. No Employee / Access Person shall challenge, in a Court of Law or otherwise, any decision taken under this Policy.

d) All information provided to Acuité in compliance with this Policy shall be kept confidential and will not be shared, except on a "need-to-know” basis or as required by or under any law.