SEBI Insider Trading
Regulations, 2015
Twenty chapter notes covering SEBI’s Prohibition of Insider Trading Regulations 2015 — the definition of ‘insider’, ‘unpublished price sensitive information’ (UPSI), the trading window, the code of conduct for listed entities, the pre-clearance framework, the insider trading prohibition under Regulation 4, the structured digital database, and the enforcement framework. UPSI first, insider status second, trading window third.
PIT — the prohibition on trading on information advantage.
The SEBI (Prohibition of Insider Trading) Regulations 2015 prohibit insiders from trading in the securities of a listed company when in possession of unpublished price sensitive information (UPSI). The 2015 Regulations replaced the 1992 Regulations with a significantly expanded framework — a broader definition of insider, a structured obligation to maintain a code of conduct, the digital database requirement, and enhanced enforcement through the prosecution track under the SEBI Act.
These notes anchor every chapter to its PIT Regulation. The most-tested Regulations are Regulation 2(1)(g) (definition of insider), Regulation 2(1)(n) (definition of UPSI), Regulation 3 (communication of UPSI), Regulation 4 (prohibition on trading when in possession of UPSI), Regulation 7 (disclosures by insiders), Regulation 8 (code of conduct), and the structured digital database.
Each chapter is designed to be read in twelve to fifteen minutes and to leave the reader with the PIT Regulation number, the UPSI definition, the insider status, the trading prohibition, and the leading authority.
How to read these notes
Start with the UPSI test.
Every PIT chapter begins with the two-part UPSI test. Is the information ‘not generally available’? Is it ‘likely to materially affect the price’? Both must be satisfied. Information that has been disclosed to the stock exchange is generally available. Information that would not move the price (immaterial information) is not UPSI.
Identify the insider status.
Every PIT question then identifies the insider. Regulation 2(1)(g) defines insider as a person who is a ‘connected person’ or in possession of or having access to UPSI. The definition is broad — it captures not only directors and officers but also intermediaries, bankers, lawyers, and anyone who received UPSI even innocently. The possession of UPSI, not the intention to misuse it, determines insider status.
Test on the leading case.
If you can restate the holding of SEBI v. Rakhi Trading Pvt Ltd, SEBI v. Hindustan Lever Ltd, or Samir C. Arora v. SEBI in two sentences, you understand the chapter. If not, return to the statutory section and rebuild from there.
All 20 chapters, in 3 groups
Sequenced through the natural structure of the subject — every chapter sits in a doctrinal cluster.Definitions — UPSI & Insider
Regulations 2(1)(g), 2(1)(n) — the threshold concepts
Regulation 2(1)(n) definition of UPSI — not generally available, price sensitive, non-exhaustive list of categories. Regulation 2(1)(g) definition of insider — a connected person or a person in possession of UPSI. Regulation 2(1)(d) definition of connected person — current and former directors, employees, and a broad range of associated persons. The deemed-UPSI list and the rebuttal presumption.
Prohibition, Trading Window & Pre-Clearance
Regulations 3–7 — the operational framework
Regulation 3 prohibition on communication or procurement of UPSI. Regulation 4 prohibition on trading when in possession of UPSI — the strict liability framework, the rebuttable presumption. Regulation 4(1) exception for trades pursuant to a trading plan. The trading window — closure before financial results, during certain corporate events, re-opening after the results are public. The pre-clearance requirement for designated persons above a specified threshold.
Trading Plans (Regulation 5)
PIT · 06Disclosures — Initial and Continual (Regulation 7)
PIT · 07Code of Fair Disclosure (Regulation 8)
PIT · 08Code of Conduct (Regulation 9)
PIT · 09Designated Persons and Trading Window
PIT · 10Pre-Clearance of Trades
PIT · 11Contra Trade Restrictions
PIT · 12Restrictions on Communication of UPSI
Code of Conduct, Database & Enforcement
Regulations 7–9 + Schedule A & B + reference
Regulation 7 disclosures by insiders — initial disclosure on appointment, continual disclosure when the holding changes by more than a threshold. Regulation 8 code of conduct for listed entities — Schedule A (minimum standards for code of conduct) and Schedule B (minimum standards for code of practices and procedures for fair disclosure). The structured digital database requirement. The enforcement framework — SEBI’s Section 11B direction power, the adjudication under SEBI Act, and the prosecution track. The landmark SAT and Supreme Court decisions on insider trading.