Insider Trading Regulations In The Digital Era
- IJLLR Journal
- Apr 26
- 1 min read
Kshitij Padhi, Amity University, Noida
ABSTRACT
Insider trading, which entails trading securities based on unpublished price- sensitive information (UPSI), undermines market fairness and investor confidence. In India, the Securities and Exchange Board of India (SEBI) addresses this issue through the SEBI (Prohibition of Insider Trading) Regulations, 2015, and subsequent amendments. However, the rise of algorithmic trading, artificial intelligence, decentralized exchanges, and encrypted communication tools has complicated the detection and enforcement of insider trading cases. The rapid global exchange of information in the digital age has exposed loopholes that challenge traditional regulatory mechanisms, necessitating a re-evaluation of legal structures in light of evolving technologies.
This dissertation examines whether SEBI’s regulatory framework is adequately equipped to tackle insider trading in the digital era. Using doctrinal and comparative legal methods, the study analyzes legislative developments, policy changes, and enforcement actions in India, while also benchmarking SEBI’s approach against international regulators such as the SEC (U.S.), FCA (UK), and MAS (Singapore). Particular focus is placed on cases involving UPSI shared via digital platforms. Despite SEBI's adoption of systems like the Integrated Market Surveillance System (IMSS) and AI tools, enforcement remains hindered by definitional ambiguities and evidentiary limitations. The study recommends strengthening real-time surveillance, expanding coverage to private digital communications, protecting whistleblowers, using blockchain for trade transparency, and enhancing international regulatory cooperation to effectively address insider trading in the digital context.
