Insider Trading Mechanism - Enforcement Issues Of Sebi

Abstract

Corporations are expected to exhibit the highest standards of professionalism, transparency, and good practices of corporate governance that boost the confidence of the investors dealing in the capital markets. Any attempt to deviate from such standards will not only erode the confidence of the investors but also affect the integrity of the markets. Insider trading refers to the act of trading securities, such as stocks, stock options, and bonds, based on information that is not available to the public. One of the major problems in regulations governing insider trading is the element of proof. It is highly difficult to detect the usage of confidential information, which is the key perspective of this crime. This paper is a conceptual study and focuses on the impact of Insider Trading on stock markets, a case analysis of Insider Trading in National and International scenarios, critically evaluating the role and challenges faced by SEBI in regulating Insider trading and mitigating the issues by adopting PIT amendments. The researcher concludes that despite laws and regulations the insider trading is still prevailing. Implementing stringent laws and effective implementation of PIT regulations is the need of the hour.