Role of SEBI In Insider Trading and the Impact of Insider Trading on Indian Financial Market

Insider trading is an illegal activity which is carried out by any person associated with the company or by any person who is related to the person associated with the company. It involves using the unpublished price sensitive information of the company which may potentially affect the stock prices of the company when the information is disclosed to the public. It is a fiduciary breach of obligation carried out by the persons involved in insider trading on investors. It undermines market integrity, fairness and investor’s confidence and result in the damage of reputation of the entity involved in unfair trade practices.This paper aims to explore measures taken by SEBI in controlling insider trading and the impact it has on financial market. The paper also discusses about the effectiveness of the consent mechanism of the SEBI. Drawing on notable case studies and committee recommendations, the article also provides reform suggestions aimed at improving regulatory oversight and investor confidence in the Indian capital market.