SEBI issues a ‘warning letter’ to Infosys on an update delay

The Securities and Exchange Board of India (SECI) has issued an “administrative warning” to Infosys due to perceived delays in updating the company’s Structured Digital Database (SDD).

A structured digital database is a collection of unpublished price-sensitive information (UPSI) that is shared internally or externally in order to monitor who was aware of a UPSI before it became public. The idea was inspired by the Sebi (Prohibition of Insider Trading) Regulations of 2015. It became effective on April 1, 2019.

In a regulatory filing on August 9, 2023, Infosys stated, “There were certain entries that were logged with a delay in the SDD because of the ongoing Covid -19 pandemic, the majority of the workers worked from their homes rather than the office premises during FY 2020-21. As a result, it was difficult to manage and maintain these documents logistically. While the information on UPSI was available in INFY throughout that time period, it appears that updating such information in the SDD system was delayed.”

Sebi, on the other hand, has stated that it does not accept Infosys’ reasoning about delays in updating its Structured Digital Database (SDD) in fiscal year 2020-21.

The stock exchange regulator recommended the corporation exercise caution on this subject in a letter. A check of the SDD should have been performed on a regular basis to verify that such information was appropriately logged. “SEBI takes the aforementioned violations very seriously.” As a result, the Company Secretary was warned and instructed to be cautious about the maintenance of SDD in the future,” according to the report.

Infosys stated that the company is now performing internal due diligence on the completeness of SDD records as part of good governance. “There has been no impact on the listed entity’s financial, operational, or other activities as a result of the administrative warning letter,” the company stated.