Policy for Dealing with Conflict of Interest for Trading / Investment

 (Trading Policy) 

Previous Revision Date	Previous Version
June 19, 2017	Version 3
July, 2015	Version 2
February 26, 2015	Version 1

 

a) This Document contains the policy and procedures with regard to Conflict of Interest in trading / investment by Employees and Senior Management (herein jointly and severally referred to as Employees) of Acuité Ratings & Research Limited (ACUITÉ) and by ACUITÉ, which was formerly known as SMERA Ratings Limited.

b) ACUITÉ and all its Employees should ensure compliance of this Policy Document and also ensure compliance of:

i.The Securities and Exchange Board of India (Insider Trading) Regulations, 1992;

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.

B. Definitions:

a) Securities

Securities include instruments like shares, debentures, bonds, warrants and derivatives both Indian and International but exclude 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) Dependent

Spouse, minor children, dependent parents, other dependents and any entity (including Hindu Undivided Family) or trust owned or controlled by the Employee/his/her Dependent.

c) Senior Management

Senior Management includes the Chief Executive Officer / Managing Director / Executive Director / WTD, all Business Heads in the Credit Rating Division, Rating Analysts and Compliance team members.

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. Trading / Investment by Employees:

a) Disclosures

i.Within seven working days from the date of joining and thereafter on an annual basis every Employee must submit to the Compliance Officer a Holding Statement of the Securities held by him/her and/or his/her Dependents, in the format given in the enclosed Annexure A.

ii.Thereafter, every Employee should submit to the Compliance Officer the Holding Statement annually as on 31^st March every year, before 30^th April of that year.

iii.As regards, the Compliance Officer, he/she shall submit the Holding Statement/s, as stated above, to the CEO.

iv.As regards, the CEO, he/she shall submit the Holding Statement/s, as stated above, to the Board of Directors.

v.The Compliance Officer shall make necessary disclosure to the Chief Executive Officer (CEO) / Executive Director / Managing Director (herein jointly and severally referred to as CEO) / Board of Directors of ACUITÉ.

vi.On completion of any and every transaction of Securities, the Employee shall furnish the transaction details within seven working days from the date of transaction to the Compliance Officer along with an updated Holding Statement as per Annexure A.

b) Prior Approval for Transactions

i.Every Employee must obtain prior written approval of the Compliance Officer, by submitting a request in duplicate, in the format given in the enclosed Annexure B, to enter into a Securities transaction (including transactions in Initial Public Offerings (IPOs)) in his/her name and/or in the name/s of his/her Dependent/s.

ii.The Compliance Officer shall, in turn, obtain necessary approval from the CEO.

iii.The Compliance Officer shall convey the approval / disapproval by returning to the Employee, a duplicate of his/her request form duly signed by the Compliance Officer.

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

v.The CEO shall convey the approval / disapproval by returning to the Compliance Officer, a duplicate of his/her request form duly signed by the CEO.

vi.As regards the CEO, he/she shall obtain prior written approval of the Executive Committee of the Board by submitting a request in duplicate in the format given in the enclosed Annexure B.

vii.The Compliance Officer shall convey the approval / disapproval by the Executive Committee by returning to the CEO, a duplicate of his/her request form duly signed by the Compliance Officer, mentioning the date of approval / disapproval by the Executive Committee.

viii. On receipt of the approval, the order must be executed within seven working days from the date of approval. If the order is not executed within the above period of seven working days, the Employee must seek prior approval for the transaction again.

ix.If the Employee does not intend to utilize the approval already given, he/she should accordingly and immediately inform the Compliance Officer of his/her decision not to utilize the given approval.

x.Approvals granted herein shall be valid for seven working 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 client of ACUITÉ based on inside information, ACUITÉ shall put such companies on the Restricted List which will be maintained by the Compliance Officer.

ii.When a company is on the Restricted List relevant to a business group, trading in Securities of that company by an Employee of that business group shall be disallowed.

iii.All Employees are prohibited from trading in any Securities issued by other Indian credit rating agencies.

d) Other Restrictions

i.An investment has to be held for a minimum period of 30 working days (after purchase before selling) in order to be considered as being held for investment purposes. In the case of IPOs, the holding period shall commence from the date of allotment of the Securities.

ii.In personal emergencies, the holding period may be waived by the Compliance Officer in consultation with the Head of Department after receiving the request from the Employee.

iii.Before participating in the rating process of a company, all analysts shall disclose upfront in writing to the Compliance Officer their shareholdings / interest in such company.

E. Members of the Rating / Grading Committee:

Members of the Rating/Grading Committee shall upfront disclose in writing their interest, if any, to the Compliance Officer in the Securities being rated / graded by ACUITÉ. Such member/s shall refrain from participating in such rating / grading by ACUITÉ.

F. Compliance, Violation:

i. Compliance of this policy is a condition of continuance of employment with ACUITÉ. Any violation will be viewed seriously by ACUITÉ who will take necessary disciplinary action including termination from service with or without notice.

ii. Compliance of this Policy by an Employee does not absolve him/her from any consequences arising out his/her violation of any regulations of SEBI / RBI.

iii. It is the policy of ACUITÉ to proactively cooperate with all Regulators and Law Enforcement Agencies in their investigations / action against any Employee of ACUITÉ.

G. General:

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

ii. 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. Such changes shall automatically form part of this Policy and shall be binding on all the Employees.

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