TagInsider Trading

Sensitization: The Key to Implementation of Insider Trading Regulations

[Ambika Mehrotra is a Manager at Vinod Kothari & Company and can be contacted at [email protected]] Background of the Regulations The strong and decisive steps taken by the Securities and Exchange Board of India (SEBI) with respect to insider trading have attracted a great deal of attention over the last couple of months. The modifications to the existing SEBI (Prohibition of Insider...

Amendments to SEBI’s Regulations on Insider Trading Are they Sufficient?

[Keshav Malpani is a B.A. LL.B. (Business Law Hons.) student at the National Law University, Jodhpur] Late last year, the Securities and Exchange Board of India (“SEBI”) came up with a modified set of regulations for insider trading in India by way of the SEBI (Prohibition of Insider Trading) Amendment Regulations, 2018 (“PITR’18”). The amendment came in pursuance of a report of the TK...

Amendment to Insider Trading Regulations: An Incentive for Insiders?

[Bhavin Gada, Soumya Shanker and Mehak Gupta are with M/s Economic Laws Practice, Advocates and Solicitors. The views of the authors are personal] On 31 December 2018, the Securities and Exchange Board of India (“SEBI”) issued an amendment to the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”). The amendment was pursuant to the recommendations made in the...

Insider Trading in Commodity Derivatives

[Peeyush Agarwal and Zarnaab Aswad are both 5th year law students at Dr. Ram Manohar Lohiya National Law University, Lucknow] Introduction Consider this: X is an employee of Y Corporation, which is a leading steel manufacturing company whose scrips are listed on stock exchanges. X, being an employee gets to know that Y Corporation has just discovered huge deposits of iron ore that, if extracted...

Analysing Some Insider Trading Implications For M&A Transactions

[Priya Garg is a 5th year student at West Bengal National University of Juridical Sciences (WBNUJS), Kolkata] Consequences of Creating the Due Diligence Exception to the Bar on the Communication of UPSI For the first time, under regulation 3 of the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT, 2015”), communication of unpublished price sensitive information (“UPSI”) per se has...

Delhi High Court Circumscribes SEBI’s Power to Initiate Adjudication Proceedings

Independent regulators must demonstrate their independence and fairness in their actions in order to maintain credibility. For this, the process by which they carry out their actions must be robust. This applies equally to India’s securities regulator, SEBI, which is the earliest independent regulator in the post-liberalisation era and one that heralded the advent of an array of similar...

WhatsApp Leak Case: Powers of SEBI vs Privacy of Individuals

[Nandini Garg is a 4th year B.A., LL.B. (Hons.) student at National Law Institute University in Bhopal] In November, 2017, Reuters reported that the second quarter earnings of 12 companies, including popular blue chips such as Dr. Reddy’s, Cipla, Tata Steel etc., were being circulated on private WhatsApp groups. This prompted the Securities and Exchange Board of India (“SEBI”) to...

Why SEBI is Failing at Regulating Insider Trading in India

[Bhavya Bhandari is currently pursuing an LLM. in Corporation Law at NYU School of Law. She can be reached at [email protected] The Indian securities market regulator has been criticized in the last two decades for its failure to investigate and prosecute perpetrators of insider trading. Even when the perpetrators are caught and punished, the penalty is often so low that the regulations have lost...

Harmonization of Insider Trading Norms and the Companies Act

[Ankit Handa and Arunima Vijay are 3rd year (VI Semester) B.A., LL.B. (Hons.) students at National Law University in Jodhpur] The Companies Amendment Act 2017 (“CAA ‘17”) has been notified by the Ministry of Corporate Affairs (“MCA”) on 3 January 2018. One of the major aims of harmonisation with the Securities and Exchange Board of India Act 1992 (“SEBI Act”) and regulations made thereunder is...

Understanding the Dichotomy between Materiality and Price Sensitivity: Where to Draw the Line?

[Anuj Bansal is a 5th year B.A. L.L.B. (Hons.) student at the Dr. Ram Manohar Lohiya National Law University, Lucknow] The approach of the securities law adjudicatory bodies, as observable through the orders on insider trading, has often given rise to an interesting issue of much academic relevance: what distinguishes ‘price sensitive information’ under SEBI (Prohibition of Insider Trading)...

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