The Indian regulatory authority, the Securities and Exchange Board of India (SEBI), has issued an “administrative warning” to Infosys due to apparent delays in updating its Structured Digital Database (SDD). The SDD tracks details of individuals or entities that receive sensitive financial information.
Infosys’ Explanation:
In a statement, Infosys explained that during the fiscal year 2020-21, due to the COVID-19 pandemic, most of its employees were working remotely from home. This remote setup made it challenging to promptly update the SDD with certain entries related to Unpublished Price Sensitive Information (UPSI). Infosys admits having the necessary information but delayed actually updating the SDD.
SEBI’s View:
However, SEBI does not agree with Infosys’ explanation for the delays. The regulatory authority stated that the company’s argument about pandemic-related challenges in updating the SDD is not acceptable.
SEBI’s Warning:
SEBI sent a letter to Infosys, advising them on this matter. The regulator should have conducted regular reviews of the SDD to ensure accurate and timely logging of information. SEBI considers these violations seriously and has warned Infosys. They advised the Company Secretary to carefully and diligently maintain the SDD (Sensitive Data Document).
What is the Structured Digital Database (SDD):
The SDD is a database containing details of individuals or entities with whom sensitive financial information, known as Unpublished Price Sensitive Information (UPSI), is shared. SEBI’s regulations mandate the proper maintenance of this database to prevent insider trading. SEBI’s (Prohibition of Insider Trading) Regulations, 2015, gave rise to this idea, and it took effect on April 1, 2019.
No Financial Impact on Infosys:
Infosys, in response to the warning, has stated that it is conducting an internal review of its SDD records to ensure their completeness. The company assured that the administrative warning will not affect its financial, operational, or other activities. This step is in line with Infosys’ commitment to good governance practices.