Insider Trading: An Overview in Indian and Global Markets

Abstract

Insider trading undermines investor confidence globally and compromises the integrity of the financial system by trading securities using material information that is not publicly available. With an emphasis on discovery and effective prosecution, the paper examines legislative frameworks and the continuous challenges in combating insider trading in India and other global markets. While highlighting the need for more robust enforcement mechanisms that adhere to global best practices, the paper examines India's insider trading laws from SEBI's initial regulations in 1992 through the 2002 and 2015 modifications. Based on their shared dedication to preserving just and equitable markets, the paper assesses the regulatory strategies of the US (SEC), EU (MAR), and Australia (ASIC). Despite strict laws and harsh punishments, the battle against insider trading is challenging due to sophisticated market intricacies and a lack of international cooperation. Stronger oversight procedures, international cooperation, improved whistleblower protection, and vigorous enforcement of current laws are all necessary to advance open financial markets and investor confidence.