Abstract

The case “SEBI and its Role in Prohibiting Insider Trading” describes the role played by the Securities and Exchange Board of India (SEBI) in regulating the securities market to prohibit insider trading activities. The case 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.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the role of a regulator in a financial/capital market
• Understand how the regulator protects the interests of investors
• Understand what a regulator needs to do to remain watchful and efficient

Keywords

SEBI; Capital Market; Securities Trading; Insider Trading; Regulatory Environment; SEBI Act, 1992; SEBI Regulations, 2002; SEBI Regulations, 2015; Companies Act of 1956; Prohibition of Insider Trading; Insider; Stock Exchange; Rakesh Agarwal vs. SEBI case; Central Economic Intelligence Bureau; Economic Offences;