Dheeresh Kumaar Dwivedi from National Law Institute University, Bhopal analyses the jurisprudence of insider trading in India.

Abstract

With the liberalization of Indian economy, the importance of capital market in Indian economy has increased multifold and with it, the threat of market manipulation. For prevention and penalization of such capital market offences, a need was felt for market regulator leading to the creation of the Securities and Exchange Board of. (“SEBI”) In furtherance of the objective to prevent market fraud, the SEBI (Prohibition of Insider Trading (PIT) Regulations) 1992 and 2015 were notified. However, in course of time, due to various developments, the law on insider trading has gone through tremendous change, on account of several legislative amendments and subsequent judicial pronouncements. The aim of the paper is to analyse the jurisprudence of insider trading in India by interpreting various legal provisions in light of settled principles of statutory interpretation and various decisions of Securities Appellate Tribunal (“SAT”). More specifically, with the help of the decision of Hon’ble SAT in M/s Chandrakala v. The Adjudicating Officer, SEBI (2012) author has strived to demonstrate the existence of anomalies in the aforementioned regulation and provide solutions therefor.