From Event Lists To Market Asymmetry: Reconstructing The Definition Of Unpublished Price Sensitive Information Under India’s 2025 Insider Trading Reforms
- IJLLR Journal
- Mar 29
- 2 min read
Shubhada Subhash Patil, Quantace Research
1. ABSTRACT
Insider trading law seeks to preserve market integrity by preventing informational advantages from being converted into private trading gains at the expense of uninformed investors. In India, this objective is pursued through the SEBI (Prohibition of Insider Trading) Regulations, 2015, where liability turns centrally on the concept of Unpublished Price Sensitive Information (UPSI). Yet the legal difficulty has never been the idea of UPSI in the abstract, but the instability of its boundaries in practice. In March 2025, SEBI amended the insider trading framework to widen the illustrative scope of UPSI by incorporating selected events aligned with the disclosure architecture of Regulation 30 and Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, with the stated objective of improving clarity, certainty and uniformity in compliance.
This paper argues that, although the 2025 reforms strengthen the compliance architecture and reduce some interpretive ambiguity, they remain anchored in an event-based method that is conceptually under-inclusive. A list-based approach may improve standardisation, but it does not fully capture the real regulatory harm in insider trading: the creation of market asymmetry through selective access to information capable of influencing valuation. The paper therefore critiques the continuing dependence on enumerated triggers and demonstrates how such a model can miss non-listed but economically significant informational advantages.
It proposes a reconstructed definition of UPSI based on a market-asymmetry and valuation-impact test. Under this framework, information should qualify as UPSI where its non-public and selective availability is capable of materially altering expected cash flows, risk assessment, governance credibility, or competitive position, thereby conferring an unfair trading advantage. This approach better aligns insider trading doctrine with the informational realities of modern securities markets.
Keywords: Unpublished Price Sensitive Information (UPSI); Insider Trading Regulation; Market Asymmetry; Market Integrity; SEBI (Prohibition of Insider Trading) Regulations; Valuation Impact; Information-Based Trading; Disclosure Obligations; Securities Law; India..
