INSIDER TRADING AND INDIAN STOCK MARKET

Dr. Vishal Purohit Pallavi Parihar

Abstract


‘Insider trading” in financial markets refers to trading in securities such as equity and bonds by company insiders who have access to exclusive information about the issue of a particulare security before such information is released other general public. This all ows insiders to benefit from buy Ingo reselling shares before they fluctuate in price.

            Insider trading has been present throughout the story of financial markets, and was particularly prevalent during periods of elementary years of Indian stock markets. Insider trading is common in developing countries like India, where it is practiced by a wide range of market participants, corporate officer sand regulative authorities. Primary insiders gain access to information by virtue of their position, employment or responsibility. They include controlling shareholders, corporate executives and officers, as well as financial-market professionals who compile information on a firm’s operation. Government officials with access to insider information also fall into this category. Secondary insiders are friends or relatives of primary insiders. Dynamic regulations not only help reduce the impact of such events but also help in restoring stability. This study reviews the Insider Trading provisions in the Securities Market of India and the emerging trends and issues.


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References


www.sebi.gov.in'Securities And Exchange Board of India - Home Page'

www.legislation.gov.uk

www.sec.gov.in

The Bombay Securities Contracts Control Act, 1925

The Companies Act, 2013

The SEBI Act, 1992

The Securities Contracts (Regulation) Act, 1956

The Securities Contracts (Regulation) Rules, 1957

Bhattacharya and Daouk, (2002), “The World Price of Insider Trading”, Journal of Finance 75-108, Vol.57

Sharma Vinita, (2016), “A review of Insider Trading provisions in the Securities Act of leading global Financial Markets”, available at www.scholar.google.co.in


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