Mohd Yasin, B.B.A.LL.B. (Hons.), Galgotias University
Ishita Singh, B.A.LL.B. (Hons.), Galgotias University
ABSTRACT
This paper examines the rising menace of insider trading in one of the world's fastest-growing economies, India, and its detrimental impact on the stock market's development. It begins by defining insider trading and outlining its negative consequences. It then provides concrete examples of misuse of unpublished price-sensitive information and breach of trust related to this issue. Understanding the historical context of regulatory efforts is crucial for analyzing their effectiveness, so the paper explores relevant committees and pre-1992 regulations.
Next, it highlights the existing measures in place to prevent insider trading in India, including disclosure requirements, Section 195 of the Companies Act, 2013, SEBI regulations from 1992, and the more recent 2015 regulations on insider trading. Through relevant case studies, the paper underscores the significance of addressing insider trading in India's dynamic economy.
Further, the paper compares India's anti-insider trading measures with those in the UK and the USA, revealing the limitations and disadvantages of the current Indian framework. Finally, it concludes with potential reformative suggestions to propel India's insider trading regulations toward the forefront of effective market control and mitigate the economic disparities that can arise from such illegal activities.
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