SEBI’s New Insider Trading Regulations Notified

Changes to the
insider trading regime in India have been in the offing for quite some time
now, and were the subject-matter of a report under the chairmanship of Justice
N.K. Sodhi. Yesterday, SEBI notified the SEBI
(Prohibition of Insider Trading Regulations), 2015
that take into account
the committee’s recommendations as well as the subsequent public consultation.
We will have the opportunity to discussion specific aspects of the new
regulations in due course.
The new
regulations are said to come into force on the 120th day from the
date of its publication in the official gazette (May
15 or so
). One minor quibble relates to why SEBI could not have stipulated
a specific date rather than leave it for calculation and possible difficulties
in interpretation.

About the author

Umakanth Varottil

Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.


  • According to Parliament of India Drafting Manual on Subordinate Legislation, there are only two ways of drafting "Short Title, Extent and Commencement Section":-

    1. These regulations shall come into force on the …….th day from the date of its publication in the Official Gazette.
    2. These regulations shall come into force on such date as the …… may by notification, in official gazette, appoint.

    Hence, SEBI seems to have gone ahead by the Rule Book.

  • Regulation 12(1) however says the 1992 Regulations are "hereby repealed". Does that mean no insider trading regulations apply till May?

  • @Anonymous. A purposive interpretation ought to suggest that since Reg. 12(1) itself comes into effect only on the 120th day from publication in the Official Gazette, the repeal of the previous Regulations would also take effect from that date. In that sense, the current regulations would continue until the new ones take effect, without there being any gap.

  • @Anonymous. The broad position would be that the old regulations would apply for insider trading occurring on May 11, although the precise answer would depend on the detailed facts and circumstances of the case.

  • Dear Umakanth Sir,
    I would like to know the meaning of Regulation 12(2) and the difference between 12(1) and 12(2) of the regulations.

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