Insider Trading In India: Legal Framework Under The Sebi Act And 2015 Regulations, Examined Through Recent High-Profile Enforcement Actions
- IJLLR Journal
- Apr 24
- 1 min read
Debasmita Mukherjee & Soujanya Das, Amity University Kolkata
ABSTRACT
This research examines the legal and enforcement framework governing insider trading in India under the Securities and Exchange Board of India Act, 1992 and the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended. It situates insider trading as a core threat to market integrity and investor confidence in a rapidly growing emerging market, and traces the evolution from the earlier 1992 regulations to the current, more expansive, possession-based regime. The study adopts a doctrinal approach, analysing statutory provisions, regulatory definitions of “insider”, “connected person” and “unpublished price sensitive information”, and the compliance architecture imposed on listed entities, alongside a close reading of recent high-profile enforcement actions such as the Indian Energy Exchange (IEX) case involving alleged leaks of a confidential regulatory order. Using these case-studies, the paper evaluates how SEBI infers possession and communication of UPSI, applies its investigative and remedial powers, and calibrates sanctions in practice. It further engages with critical academic and practitioner commentary to assess whether the current framework is conceptually coherent, procedurally fair, and sufficiently deterrent, while also considering limited comparative insights from other major securities markets. The paper argues that although the 2015 Regulations represent a significant strengthening and modernisation of India’s insider trading law, persistent evidentiary hurdles, delays, and ambiguities in key concepts necessitate targeted reforms to enhance both effectiveness and legitimacy of enforcement in India’s securities market.
Keywords: Insider trading, SEBI Act 1992, SEBI (Prohibition of Insider Trading) Regulations 2015, Market integrity and UPSI, SEBI enforcement actions.
