Requirement to control over UPSI

Pragya Bhandari

The regulations regulate all the corporate dealings in securities of listed company and thereby protect the interest of the investors. Leakage of unpublished price sensitive information is prohibited as per the Regulations, thus, SEBI ordered companies to strengthen system for handling of sensitive information as in the case of Axis Bank Ltd. The learned author seeks to present legal provisions related to unpublished price sensitive information and case thereof.

The Securities and Exchange Board of India has issued the SEBI (Prohibition of Insider Trading) Regulations, 2015 (hereinafter referred to as 'the regulations') for prohibition of insider trading in securities and to strengthen the legal framework thereof.

1. Insider trading--Meaning of

Insider trading means trading in the shares of a company by persons who are in the management of the company or are close to them on the basis of 'unpublished price sensitive information' regarding the working of the company, which they possess but is not available to the general public.

Thus, in gist, insider trading can be said as a malpractice wherein trading of a company's securities is undertaken by people, who by virtue of their responsibilities have access to price sensitive information regarding securities of a company, which can be crucial for making investment decisions.