| Pub. Date | : October, 2021 |
|---|---|
| Product Name | : The IUP Journal of Accounting Research and Audit Practices |
| Product Type | : Article |
| Product Code | : IJARAP331021 |
| Author Name | : Richa Gupta* and Smita Ray |
| Availability | : YES |
| Subject/Domain | : Finance |
| Download Format | : PDF Format |
| No. of Pages | : 10 |
The case describes the role played by the Securities and Exchange Board of India (SEBI) in regulating the securities market to prohibit insider trading activities. It starts out with a brief history of insider trading and then explains the need for a regulatory body in the Indian Capital market. It then describes the various SEBI Acts, starting with the SEBI Prohibition of Insider Trading Act 1992, and the subsequent amendments in 2002, 2015, and 2018. The case also covers the process of investigation under the SEBI Prohibition of Insider Trading, 1992. Besides, it highlights the challenges faced by SEBI in prohibiting insider trading. It also shows that the cases of insider trading have been increasing and concludes by stating that more support from the Government of India (GoI) will help SEBI in controlling insider trading more effectively.
When the whole system depends on the trust, when capital markets are booming and
people are investing in the markets if select people have access to results before it is
in the public domain, it is just not on. We're looking into it from all aspects: whatever
technological improvement is required, whatever system improvement is needed,
whatever legal and enforcement actions are required, we will do.1
- Ajay Tyagi, Chairman,
Securities and Exchange Board of India (SEBI) in 2017
In October 2019, Indian capital market regulator, the Securities and Exchange Board of India (SEBI) declared that the code of conduct under the insider trading2 norms was applicable not only to persons designated by the board of a company but also to the promoters. It said,