SEBI Insider Trading
Compliance Rules

INSIDER TRADING = trading in securities based on UNPUBLISHED PRICE SENSITIVE INFORMATION (UPSI). ILLEGAL under SEBI regulations + Companies Act.

KEY: (1) USE of confidential info NOT publicly available. (2) MISUSE for personal gain (own trades + family + tipees). (3) APPLIES to listed company employees, directors, auditors, vendors, advisors. (4) SEVERE PENALTIES — ₹25cr+ + criminal prosecution. (5) DETECTED via SEBI's algorithmic surveillance + whistleblowers.

UPSI = material info not yet public. EXAMPLES: (1) Quarterly financial results before announcement. (2) Major contract wins. (3) M&A discussions. (4) Top management changes. (5) Dividend declarations. (6) New product launches. (7) Major plant shutdowns. (8) Regulatory actions. (9) Credit rating changes. (10) Bonus + rights issue.

ONCE PUBLIC: ceases to be UPSI. STRATEGIC: companies maintain UPSI list + control access.

DESIGNATED PERSONS: (1) Directors. (2) KMP (Key Managerial Personnel). (3) Promoters. (4) Employees with UPSI access (typically top 5-10% of org). (5) Auditors + statutory advisors. (6) Connected persons. TRADING WINDOW: (1) CLOSED before + during UPSI period. (2) OPENS 48 hours after public disclosure. (3) Pre-clearance required for trades > ₹10L (designated persons). (4) ANNUAL DISCLOSURE of holdings to company. (5) FAILURE: severe penalty + share suspension.

INSIDER TRADING PENALTIES (per Section 15G + 24): (1) SEBI Adjudicating Officer: MAX 3 TIMES PROFIT made (or ₹25 cr — whichever HIGHER). (2) CRIMINAL PROSECUTION: imprisonment up to 10 YEARS + fine ₹25cr. (3) DEBARMENT from securities market 5+ years. (4) DISGORGEMENT of all profits. EXAMPLES: (1) Manju Lata case ₹4cr penalty. (2) Multiple high-profile cases ₹50cr+ disgorgement. (3) Corporate executives + connected persons frequently caught.

COMPLIANCE FOR LISTED COMPANIES: (1) UPSI POLICY + Code of Conduct. (2) DESIGNATED PERSONS list maintained. (3) TRADING WINDOW notifications. (4) PRE-CLEARANCE mechanism for trades. (5) ANNUAL DISCLOSURE of holdings. (6) TRAINING for designated persons. (7) WHISTLEBLOWER mechanism. (8) WATCHLIST + RESTRICTED LIST maintenance. PERSONAL COMPLIANCE: (1) DON'T trade if you have UPSI. (2) Wait 48 hours after public disclosure. (3) Pre-clearance for large trades. (4) Report dependents' trades.

CONSULT CS (Company Secretary) for any complex scenarios.