The Securities and Exchange Board of India (SEBI) has issued a sweeping directive banning all forms of insider trading within public limited companies, effective immediately. This decisive move strengthens the enforcement of the SEBI (Prohibition of Insider Trading) Regulations, 2015, and comes amid increasing concerns about the misuse of unpublished price-sensitive information (UPSI) in recent market activities. The updated directive extends beyond traditional company insiders and now includes intermediaries, auditors, consultants, and legal advisors who may have access to confidential corporate information.

Under the new enforcement framework, SEBI has empowered its Surveillance and Investigation Department to carry out real-time monitoring of trade patterns, cross-verifying them against company-specific announcements, board decisions, and financial disclosures. Public limited companies are now required to implement stronger internal controls, such as automated trading restrictions during blackout periods and mandatory reporting of all trades made by designated persons. Violations of the ban will lead to severe financial penalties, suspension of trading privileges, and prosecution under the SEBI Act, with enhanced coordination with the Income Tax Department and Enforcement Directorate for deeper probes.

To ensure robust compliance, SEBI has also directed listed entities to revise their Codes of Conduct, create whistleblower hotlines, and institute internal audit mechanisms to detect and report suspicious trading activity. Further, quarterly disclosures on compliance status must now be filed with stock exchanges. Industry analysts consider this immediate ban a zero-tolerance message to market participants, reinforcing the regulator’s commitment to fair play and integrity in Indian capital markets. The capital market watchdog has also announced that detailed guidance and FAQs on the revised insider trading norms will be released shortly to help stakeholders adapt to the stricter regime.