Insider Trading in India: Evolution of Law, Regulatory Framework, and Emerging Challenges

This paper offers a thorough examination of insider trading in India, looking at its history, legal system, and current difficulties. The practice of trading securities based on significant non-public information, or insider trading, has long been a controversial topic in global financial markets. The Securities and Exchange Board of India (SEBI) and other regulations were the results of India's efforts to control insider trading, which started in the late 1970s. Highlighting significant committee reports and legislative turning points, the paper charts this historical evolution. The current regulatory environment is then examined, with particular attention paid to the SEBI (Prohibition of Insider Trading) Regulations and their most recent revisions. The article discusses significant cases that have influenced the regulatory landscape while analyzing SEBI's strategy for detecting and prosecuting insider trading. Insider trading still presents problems for regulators and market integrity despite tremendous advancements. These challenges are examined in the paper, along with the need for investor protection, the argument over criminal liability, and evidentiary barriers. Additionally, it offers a balanced viewpoint on this complicated matter by presenting arguments for and against the legalization of insider trading. The article ends by outlining possible ways to improve India's insider trading laws, stressing the value of corporate governance, education, international collaboration, and the legal system. The article seeks to add to the continuing discussion on how to effectively regulate insider trading in India's developing financial markets by offering this thorough overview.