Sebi has said that insider trading regulations would be applicable on all "connected persons" and not just on persons designated by the board of a company.

The clarifications have been given as part of an informal guidance sought by brokerage firm Prabhudas Lilladher regarding certain aspects of Prohibition of Insider Trading (PIT) regulations.

Employees and connected persons are designated on the basis of functional role and not only on seniority, the regulator said.

"The code of conduct applies to all connected persons and not only to designated persons. It may further be stated that designated persons are specified by the Board of Directors in consultation with the compliance officer," Sebi said in the five-page interpretive letter.

The letter, issued in December last, was made public today by the watchdog.

According to Sebi, any person, irrespective of being listed or unlisted, may be covered by the definition of 'connected persons' if that person has a connection with the company that may put him in possession of Unpublished Price Sensitive Information (UPSI).

Noting that this position is based on the information furnished, Sebi said, "different facts or conditions might lead to a different result".

"This letter does not express a decision of the board on the question referred," the regulator added.