Insider Trading In India: Regulatory Landscape And Implications

Chinoy Acharya, Bennett University

ABSTRACT:

This abstract gives an overview of the regulations that govern insider trading in India and the implications they carry. In India insider trading refers to the buying or selling of securities using information and it is strictly prohibited by the “Securities and Exchange Board of India (SEBI)”. The “SEBI (Prohibition of Insider Trading) Regulations, 2015” define who qualifies as insiders outline Unpublished Price Sensitive Information (UPSI) and prohibit trading while, in possession of UPSI. To promote transparency and compliance these regulations require companies to establish a code of conduct. Insiders must disclose their trading activities to allow regulatory authorities to monitor and enforce compliance effectively. Violating these regulations comes with penalties such as fines, disgorgement of profits and trading bans. The enforcement mechanism involves monitoring, investigations well as the authority to conduct searches and seizures when necessary. Companies often adopt clearance procedures to prevent unintentional violations. This comprehensive regulatory approach demonstrates a commitment towards upholding market integrity and fostering investor confidence, in India’s markets.