"Most of the members of the committee on insider trading are of the view that the earlier mandate has the potency of leading to insider trading by those who are privy to the decisions of corporate boards, and favoured disclosure as and when an event happens," Sebi senior executive director Mr LK Singhvi told The Financial Express after the committee's meeting here on Saturday.

Besides, the earlier practice is also found to be inconsistent with established international practices and creating problems for companies listed in US bourses, who have to adhere to the same kind of rule stipulated by the Securities Exchange Commission there, he added.

The regulator has also decided to relax its earlier decision to curb selective disclosure of information to analysts and institutions by companies, in the case of disclosure pertaining to contractual and legal obligations, credit rating agencies and advisors or consultants on various corporate matters.

However, these categories of people would be considered as insiders temporarily under the code to curb insider trading during the specific period they were in possession of insider information, he said.The committee also decided to make it mandatory for the key officers and directors of the company, as also those acquired more than five per cent of the company's stake, to disclose immediately when there was any change in their holdings as and when it happenend.

It was also decided to set a threshold limit for such reporting to stock exchanges at its next meeting to be held after three weeks, he said and added, "But, we are not going to set this limit at single share as it is in the US. We may set it at 100 shares of either buying or selling to trigger the need for reporting."

The committee, headed by Kumar Mangalam Birla, was also looking into the regulatory aspects of insider trading in companies not listed on domestic exchanges, but listed outside the country, which the existing code does not cover, he said.

The move was basically spurred by the fact that material developments of such companies were taking place in India and there was every likelihood that they may lead to insider trading at the other end of the globe, he added.

The committee was also trying to fine-tune and bring clarity to several definitions of the earlier code and, in this direction, it was scheduled to discuss in the next meeting, all finer points relating to Procedure and Code of Conduct for Corporates, Intermediaries and Professionals, which envisages outlining the broad code for self-regulation by corporates towards curbing insider trading, he added.