LIJDLR

Insider Trading

INSIDER TRADING REGULATIONS IN INDIA AND THE UNITED STATES: A COMPARATIVE LEGAL ANALYSIS

Volume IV Issue I /

INSIDER TRADING REGULATIONS IN INDIA AND THE UNITED STATES: A COMPARATIVE LEGAL ANALYSIS Tanishqa Kesarwani, Student, 10th Semester, BA LLB(H), Amity Law School, Amity University Lucknow (India) Dr. Axita Srivastava, Assistant Professor at Amity Law School, Amity University Lucknow (India) Download Manuscript doi.org/10.70183/lijdlr.2026.v04.81 Insider trading poses a serious threat to the fairness, transparency, and integrity of securities markets by allowing certain market participants to exploit unpublished price sensitive or material nonpublic information for personal gain. This research paper undertakes a comparative legal analysis of insider trading regulations in India and the United States, examining their conceptual foundations, regulatory frameworks, and enforcement mechanisms. The study analyses the evolution of insider trading law in India under the Securities and Exchange Board of India Act, 1992 and the SEBI (Prohibition of Insider Trading) Regulations, 2015, and contrasts it with the United States regime developed primarily through the Securities Exchange Act of 1934, Rule 10b-5, and judicial doctrines such as the classical theory, tippee liability, and the misappropriation theory. The paper highlights how India follows a predominantly possession based and rule driven regulatory approach, while the United States relies on a fiduciary duty and deception-based model shaped by judicial interpretation. Through an examination of statutory provisions, landmark judicial decisions, and enforcement practices of SEBI and the US Securities and Exchange Commission, the study evaluates the effectiveness of both regimes in protecting investors and maintaining market integrity. The paper concludes by identifying regulatory gaps and best practices and offers reasoned suggestions for strengthening the Indian insider trading framework in light of comparative insights.

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INSIDER TRADING AND UNPUBLISHED PRICE SENSITIVE INFORMATION IN INDIA – EXAMINING REGULATORY LOOPHOLES, EVIDENTIARY CHALLENGES AND THE IMPERATIVE FOR STRONGER ENFORCEMENT

Volume III Issue IV /

INSIDER TRADING AND UNPUBLISHED PRICE SENSITIVE INFORMATION IN INDIA – EXAMINING REGULATORY LOOPHOLES, EVIDENTIARY CHALLENGES AND THE IMPERATIVE FOR STRONGER ENFORCEMENT Hridyanshu Mahajan, 2nd Year B.B.A. LL.B (Hons.) Student at ILC, Faculty of Law, University of Delhi, Delhi, (India). Download Manuscript doi.org/10.70183/lijdlr.2025.v03.136 The Federal nature of India as envisaged in the Constitution of India, represents an interactive and harmonious liaison between the Centre and the States along the legislative, administrative and financial spheres. The workings of Indian federalism, however, have been characterized by intra-State domination, hiccups and unbalanced growth. The paper has taken a critical look at the constitutional provisions (Articles 245 to 263), institutional mechanism, and changing politics that characterize Centre State relationship. It points out structural problems like vertical fiscal imbalance, little autonomy of States, political centralization and deterioration of consultative forums like the Inter-State Council and Finances Commission. This paper finds that the evidences suggest systemic encumbrance on federal operations through an examination of the occurrence of the following policy episodes, which include; the announcement of the GST, passing of the farm laws, and failing to compensate GST.  More so, it proposes inter-State developmental inequalities, emergency measures, and politicization of the powers of the governor to be major obstacles of cooperative federalism. Based on constitutional directive, expert reports of the committee and monetary statistics, the paper offers solutions with reformist leaning such as fortification of institutional federalism, adjustment of fiscal transfers and formalized consultations between the Centre and the State. It is concluded that, in order to reap the fulfilment of a balanced, inclusive and a functioning federal India, it is important to commit again to the principles of decentralisation, democratic federalism and mutual respect between the States and the Union.

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ALGORITHMIC TRADING AND MARKET MANIPULATION: A LEGAL PERSPECTIVE ON INSIDER TRADING REGULATIONS

Volume III Issue I /

ALGORITHMIC TRADING AND MARKET MANIPULATION: A LEGAL PERSPECTIVE ON INSIDER TRADING REGULATIONS Anurag Singh, BA.LLB, (HONS.) 5TH YEAR, MANAV RACHNA UNIVERSITY Download Manuscript doi.org/10.70183/lijdlr.2024.v03.17 Algorithmic trading has revolutionized financial markets by increasing efficiency, reducing transaction costs, and enhancing liquidity. However, its rapid expansion has introduced significant concerns regarding market manipulation, insider trading, and regulatory oversight. The rise of High-Frequency Trading (HFT), which enables thousands of transactions per second, has made it increasingly difficult for regulators to detect and prevent fraudulent trading practices. In jurisdictions like India, the SEBI (Prohibition of Insider Trading) Regulations, 2015 govern securities transactions and aim to prevent the misuse of Unpublished Price-Sensitive Information (UPSI) by insiders. However, these regulations were primarily designed for traditional trading environments and may not adequately address the complexities of AI-driven trading strategies. Algorithmic trading raises unique legal challenges, such as lack of transparency, difficulty in establishing intent, and regulatory enforcement gaps. This paper critically examines whether India’s existing legal framework is sufficient to regulate algorithmic trading and prevent insider trading in automated transactions. The study further explores global regulatory approaches in jurisdictions such as the United States (SEC), United Kingdom (FCA), and the European Union (MiFID II Regulations), which have implemented sophisticated AI-based market surveillance mechanisms and real-time monitoring to curb manipulation. Comparative analysis highlights regulatory best practices that could be adapted to India’s financial markets. In light of these challenges, this paper proposes legal and policy reforms, including mandatory algorithmic audits, enhanced AI-driven surveillance mechanisms, cross-border regulatory cooperation, and clearer definitions of algorithmic insider trading. Strengthening SEBI’s oversight capacity with RegTech solutions can enhance transparency, prevent market manipulation, and ensure fair trading practices. As algorithmic trading continues to evolve, regulatory frameworks must be dynamic and adaptive to safeguard market integrity while fostering innovation in India’s financial ecosystem. Type Information Research Paper LawFoyer International Journal of Doctrinal Legal Research, Volume III, Issue I, Page 367-387. Creative Commons Copyright This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. © Authors, 2024

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ROLE OF SEBI IN CURBING MARKET MANIPULATION AND INSIDER TRADING

Volume II Issue III /

ROLE OF SEBI IN CURBING MARKET MANIPULATION AND INSIDER TRADING Md Jafar Ekbal, Chanakya National Law University, Patna Md Imran, Chanakya National Law University, Patna Download Manuscript doi.org/10.70183/lijdlr.2024.v02.28 This research paper examines the role of SEBI in keeping the securities market free from fraudulent activities like market manipulation and insider trading. SEBI has enacted several legislation and guidelines to curb these malpractices in the market but instead of that, there are lots of cases of market manipulation and insider trading that occurred in the past few years. Despite looking into numerous cases of insider trading over the past 20 years, SEBI has not been able to successfully convict many of them. The penalties are sometimes so minimal that any deterrent impact that the restrictions may have had is lost, even in cases where the offenders are apprehended and punished. This research paper starts by analyzing the SEBI ICDR Regulations in facilitating capital issuances and how it is protecting investors’ interests. Furthermore, it aims to descriptively analyze the SEBI Regulations regarding Insider Trading and Market Manipulation and how they help in curbing market manipulations. The researcher will also study the effectiveness of these regulations and whether these regulations are implemented or not. This paper further discusses the present surveillance mechanism and investigation procedure of SEBI in case of market manipulation and insider trading and tries to find out the ways through which these surveillance mechanisms and investigation procedures can be made more effective. Finally, this paper thoroughly analyzes the various challenges that SEBI faced while regulating the securities market, tries to identify potential areas for improvement, and suggests recommendations to enhance the effectiveness of SEBI in protecting the market from unfair practices. Type Information Research Paper LawFoyer International Journal of Doctrinal Legal Research, Volume II, Issue III, Page 478-490. Creative Commons Copyright This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. Copyright © LIJDLR 2024

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