You have decided to buy more of your employer's shares, or to sell some to fund a house deposit. Both are ordinary decisions. Neither is available to you on the day you make it, because you are a designated person under your company's insider trading code, the quarter has just ended, and the trading window is shut until forty-eight hours after results are published. The constraint has nothing to do with whether you know anything. It applies because of where you sit.
A school does not let a teacher mark her own child's paper. Nobody is accusing her of anything, and she may well be the most scrupulous person on the staff. The rule exists because afterwards there would be no way to demonstrate that the marking was clean, and a rule that depends on demonstrating honesty after the fact is not a rule.
The trading window works the same way. It closes on every designated person regardless of what they actually know, because a rule that turned on individual knowledge could never be enforced. Your integrity is not the question the regulation is answering.
The four constraints, in the order they bite
| Constraint | What it says | Practical effect |
|---|---|---|
| Trading window closure | Closed from the end of each quarter until 48 hours after results are declared | Four blocked stretches a year, each several weeks long |
| Pre-clearance | Required above a value threshold set in the company's own code; the model code in Schedule B then requires the trade to be executed within seven trading days of approval | You cannot act on the day you decide, and an unexecuted approval lapses |
| Contra trade bar | No opposite transaction within six months of a trade by a designated person | A purchase locks you out of selling for half a year, and the reverse |
| Disclosure | Transactions aggregating above ₹10 lakh in value in any calendar quarter must be disclosed to the company within two trading days, and onward to the exchange | Your personal trades become a public filing |
How many days a year are actually open
What is restricted and what is not
- Buying or selling your employer's listed shares
- The same transactions by your immediate relatives, who are usually covered by the code
- Selling shares received on exercise of employee stock options
- A single-stock position in your employer taken through any account, including a family member's
- For employees of brokers, research firms and asset managers, a separate personal-trading code with its own pre-clearance and minimum holding periods
- A diversified equity mutual fund, index fund or exchange traded fund
- A recurring SIP into such a fund, which is why an SIP is the format that survives a closed window
- Public Provident Fund, National Pension System and fixed deposits
- The exercise of stock options itself, as distinct from selling the resulting shares — SEBI has clarified this, and the clarification is worth re-reading before you rely on it
- Shares of unrelated listed companies, unless your code restricts a sector or a counterparty list
Running a portfolio inside the closures
- 1Get the code and the calendar in writing
Ask the compliance officer for the current code of conduct, your designation status, the pre-clearance threshold and the execution deadline after approval. Then put the four likely closure windows into your own calendar at the start of the financial year.
- 2Move the flexible things into funds
Anything you want to happen monthly and automatically — the bulk of most people's investing — belongs in instruments the code does not touch. A monthly SIP into a diversified fund runs through every closed window without a single approval.
- 3Batch the single-stock decisions
Keep a short written list of intended transactions and execute it in the first open window, in one pass, with pre-clearance sought for the whole list. This is slower than reacting, and reacting was not available to you anyway.
- 4Consider a trading plan for large, dated needs
The regulations allow an insider to formulate and publicly disclose a trading plan that is then implemented mechanically, with a cool-off period between disclosure and the first trade. The cool-off and minimum coverage were revised in a 2024 amendment, so check the current text with your compliance officer rather than relying on any summary, including this one.
- 5Watch the concentration you already have
Salary, bonus, stock options and your holding in the same employer are one exposure with four names. The rules make it slow to reduce, which is an argument for not letting it build up faster than you can unwind it.
You are a designated person and bought 500 of your employer's shares in the open window in August. In November, during another open window, you want to sell them to fund a payment. What is the position?
Railway phatak band ho toh scooter wale ka kaam khatam nahi hota — bas intezaar karna padta hai, aur khulne ka waqt train tay karti hai, aap nahi. Company mein designated person ho toh trading window bhi wahi phatak hai: quarter khatam hote hi band, aur results ke 48 ghante baad hi khulta hai. Saal mein chaar baar, kul milakar teen-chaar mahine. Plan wahi chalega jo band phatak pe bhi apne aap chalta rahe.
- The window is shut from each quarter end until 48 hours after results — roughly 125 days a year.
- Pre-clearance, the six-month contra trade bar and ₹10 lakh disclosure are separate conditions.
- Your company's code binds you and can be stricter than SEBI's floor; read the code itself.
- Diversified mutual fund SIPs are generally untouched, which is why they survive closed windows.
- Salary, bonus, options and shares in one employer are a single exposure that is slow to unwind.
Mark it done to track your progress through the curriculum.
Common questions
Short, direct answers to what people ask about this topic.
- trading window closure meaning
- A trading window closure is the stretch during which designated persons at a listed company are barred from dealing in that company’s own securities. Under SEBI’s Prohibition of Insider Trading Regulations, 2015, the window must be shut from the end of each quarter until 48 hours after the results for that quarter are declared — roughly a third of the year in practice. It closes on everyone designated, regardless of whether they actually hold any unpublished price sensitive information.
- a designated person who buys his own company shares cannot sell them for
- At least six months. This is the contra trade restriction: a designated person may not execute an opposite transaction within six months of a trade, and it binds even when the trading window is open and pre-clearance would be granted. It works in both directions, so a sale also locks you out of buying. A compliance officer can relax it for reasons recorded in writing, but that relaxation should never be planned on.
- can I continue my SIP when my company trading window is closed
- A recurring SIP into a diversified equity mutual fund, index fund or exchange traded fund is generally outside a company’s insider trading code, which restricts dealing in that company’s own securities. That is why an SIP is the format that survives closed windows — it keeps running without pre-clearance. Read your own employer’s code before relying on this, and note that employees of brokers, research firms and asset managers face a separate personal-trading code that can be stricter.
- how much can a designated person trade before it must be disclosed
- Transactions aggregating above ₹10 lakh in value in any calendar quarter must be disclosed by the designated person to the company within two trading days, and the company reports them onward to the exchange. The threshold applies to the aggregate value across the quarter, not to any single trade, and the disclosure becomes a public filing. A company’s own code may set a lower figure, and the code is what binds the employee.
- who is a designated person under SEBI insider trading regulations
- A designated person is anyone the listed company itself names in its code of conduct as subject to the trading window, pre-clearance, contra trade and disclosure restrictions. The list routinely extends well beyond senior management — to finance, legal, secretarial, investor relations and business planning staff, to anyone with access to the systems those teams use, and to immediate relatives. Plenty of people discover they were designated only when a routine transaction triggers a compliance query.