INSIDER TRADING, REGULATORY ADVANCEMENT AND REGULATOR ACTIVISM IN INDIA

In the era of globalization and the world economy, corporations and governments are focusing more on the concept of sustainability and far-going security to the stakeholders and investors. Insider trading is a deep-rooted evil opportunity in the stock market. The transfer of unpublished price-sensitive information to an outsider or the use of it for unfair gains by the insider is a governance issue per se. The current Indian regulation i.e. SEBI (Insider Trading) Regulation 2015 has traveled a long journey to curb the root cause but still must move on the international parameters. It has a major objective to prevent the unauthorized use of price-sensitive information. The review paper will critically analyze the historical development in the Indian Capital market with reference to the incidents of insider trading and preventive steps by the Indian market regulations and regulator activism. It will also review the regulatory advancement of the insider trading norms after the Harshad Mehta scandal in the year 1992 to the happening of ICICI-Videocon loan scam and thereafter. The objective of the review paper is a structural analysis of the historical development in the regulatory framework of insider trading in India. Also, to demonstrate the legal transformation of Indian Stock Exchanges in response to insider trading issues.