Insider Trading in India: Regulation and Investor Protection

Insider trading undermines the equality of access on which securities markets depend. In India, it is regulated mainly through the SEBI (Prohibition of Insider Trading) Regulations, 2015, enforced by the Securities and Exchange Board of India. This paper examines how effective the framework is in preventing insider trading and protecting investors. It traces the law's evolution up to the 2024 and 2025 amendments, analyses the disclosure, compliance and enforcement mechanisms, and reviews the judicial approach in SEBI v. Abhijit Rajan and SEBI v. Rajeev Vasant Sheth. It argues that the framework is strong in design but limited by difficulties in detection, judicial uncertainty and the lack of investor compensation, and it suggests reforms.