The Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2008, defines an “insider” as any person who
(i) is or was connected with the company or is deemed to have been connected with the company and who is reasonably expected to have access to unpublished price-sensitive information in respect of securities of a company, or
(ii) has received or has had access to such unpublished price sensitive information”
Securities and Exchange Board of India (Sebi) rules forbid insider trading in the shares of a company only during the “Quiet Period”, which is seven days before the announcement of price-sensitive information. But the actual “Quiet Period” may be decided by the company.
Benefits of stopping insider trading
To stop the unethical trading and protect the non-public information trading on insider information is banned in the capital market.