NOVUS LITE

SDD (Structured Digital Database) is a mandatory compliance requirement by SEBI for all CA firms in India. It is a secure, tamper-proof database where companies must record Unpublished Price Sensitive Information (UPSI) and details of all individuals or entities who have access to it. This helps prevent insider trading and ensures regulatory transparency.

SEBI has issued several regulations for CA firms, including:

• Structured Digital Database (SDD) Compliance: Maintain a secure log of all UPSI and its recipients.
• Prohibition of Insider Trading (PIT) Regulations: Prevent unfair trading based on non-public information.
• Corporate Governance & Disclosure Norms: Timely financial disclosures and board-level compliance.
• SEBI LODR (Listing Obligations and Disclosure Requirements): Ensure fair disclosure of material events.
• Cybersecurity & Data Protection Compliance: Secure sensitive business and financial data.

Trading as defined under Regulation 2 (1) (l) means and includes subscribing, buying, selling, dealing,  or agreeing to subscribe,  buy,  sell,  deal in any securities,  and  "trade" shall be construed accordingly. 

The term trading is widely defined to include dealing in securities and intended to curb the activities based on unpublished price sensitive information (UPSI) which are strictly not buying,  selling or subscribing,  such  as  pledging etc.  Hence,  trading would include creation/invocation/revocation of pledge.

The SEBI-mandated SDD must include:

• Nature of UPSI: What confidential information is being shared?
• Date & Time of Access: When was the UPSI generated or shared?
• Recipient Details: Name, designation, organization, and relationship to the company.
• Purpose of Access: Why was the UPSI shared with the recipient?
• Audit Logs & Access History: A complete, unalterable log of all changes and views.

The Structured Digital Database (SDD) is used for:

• Tracking & Preventing Insider Trading: Ensures transparency in handling UPSI.
• Regulatory Compliance: Helps CA firms meet SEBI’s compliance requirements.
• Audit & Investigation Support: Provides a secure record for regulatory audits.
• Governance & Risk Management: Strengthens corporate governance practices.

SEBI issues regular circulars regarding Structured Digital Database (SDD) compliance for CA firms. The latest circular emphasizes:

• Mandatory SDD Maintenance: All CA firms must maintain an SDD to log UPSI access.
• Data Integrity & Security: The SDD must be tamper-proof, ensuring no unauthorized changes.
• Audit & Review by SEBI: Companies must be prepared for regulatory audits of their SDD.
• Automation & SaaS-Based Compliance Solutions: SEBI encourages companies to adopt cloud-based compliance platforms to streamline SDD maintenance.