The Structured Digital Database: Your UPSI Paper Trail

SEBI's Prohibition of Insider Trading framework requires relevant persons to maintain a Structured Digital Database recording the sharing of Unpublished Price Sensitive Information. The database should identify the persons or entities with whom UPSI is shared, along with the required details of the sharing, and must be maintained with adequate internal controls to preserve integrity and prevent tampering.

The SDD is not only an IT compliance tool. It depends on legal, finance, investor-relations, HR, transaction, and management teams recording UPSI access contemporaneously. UPSI may arise in financial results, fundraising, mergers and acquisitions, major contracts, defaults, key-personnel changes, litigation, or other material developments.

Set clear triggers for UPSI classification, authorisation to share information, and database entry. Reconcile the SDD periodically against deal-room access, Board papers, committee records, adviser lists, earnings-preparation teams, email distributions, and insider-list controls. Delayed reconstruction from emails is a weak substitute for contemporaneous records.

The record must be preserved for at least eight years after completion of the relevant transaction, and longer where an investigation or enforcement proceeding requires it. In a regulatory inquiry, complete and reliable SDD records can help demonstrate that the company controlled the flow of price-sensitive information; gaps or unexplained entries may undermine confidence in those controls.