Definition
Trading Window
The trading window is the period during which a company's insiders are permitted to trade its shares; it is closed when UPSI exists.
Under SEBI's PIT Regulations, companies must close the trading window for designated persons during periods when UPSI is likely to exist — most notably from the end of a quarter until results are announced. Insiders cannot deal in the company's securities while the window is closed.
To enforce this, exchanges and depositories help freeze the PAN-linked accounts of designated persons during the closure. Trades intended during the open window can be facilitated through pre-cleared transactions, and longer-term dealing can be done via a trading plan.
Related terms
- SEBI Insider Trading Code (PIT)The SEBI (Prohibition of Insider Trading) Regulations, or PIT, ban trading in a company's securities while in possession of unpublished price-sensitive information.
- Unpublished Price-Sensitive Information (UPSI)UPSI is non-public information about a company that, once known, could materially affect the price of its securities.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.