The act of Insider Trading does not only shake the capital markets, but also impacts the genuine Investors and the country’s economic growth. Various committees constituted by the Government have recommended measures to prohibit the practice of insider trading and the need to regulate the same. To deal with market abuse related to “insider trading”, the Securities and Exchange Board of India (SEBI) had promulgated the Prohibition of Insider Trading Regulations, 1992.
To curb the malpractice of Insider Trading more effectively, the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) were introduced with effect from 15th May, 2015, by repealing the erstwhile SEBI (Prohibition of Insider Trading) Regulations 1992.
Prevention of Insider Trading requires deep understanding of PIT Regulations by those who are entrusted with the responsibility to ensure compliance thereof. Being a topic of utmost importance for the professionals, the ICSI decided to bring out a comprehensive Guidance Note on Prevention of Insider Trading primarily based on the PIT Regulations, guidance note and FAQs thereon and informal guidances issued by the SEBI from time to time.
The Guidance Note is supplemented with specimen format of disclosures required under the PIT Regulations, important case laws on the subject and recent amendments introduced pursuant to recommendations of the Viswanathan Committee.