insider trading

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13 April 2011 can anyone plz explain the meaning of insider trading?

udit sharma

udit sharma (Expert)
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14 April 2011 Insider Trading is an act of dealing in securities of the Company by an insider while in possession of unpublished price sensitive information in relation to a Company.

As per SEBI (Prohibition of Insider Trading) Regulations, 1992:

Dealing means subscribing, buying or selling or agreeing to subscribe, buy or sell the securities of a body corporate either as a principal or agent.

Insider means a person:

a) who is or has been connected with the Company or is deemed to be connceted with the Company and may be reasonably be expected to have access to unpublished price sensitive information, or

b) has received or has had access to unpublished price sensitive information.

For understanding the meaning of ' Connected Person' pls. read the said regulations.

Price Sensitive information means the information which directly or indirectly relates to a body corporate and when published is likey to materially affect the price of the securities of body corporate.

Unpublished information is the information which is not published by the Company or its agents and is not specific in nature. Speculative reports in print or electronic media is not termed as published information.

God Bless

CS Udit Sharma

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