SEBI Urges Tighter Insider Trading Enforcement Across Financial System
India’s market regulator is pressing banks and fellow regulators to strengthen enforcement of insider trading rules, with a sharper focus on safeguarding unpublished price sensitive information. Securities and Exchange Board of India Chair Tuhin Kanta Pandey said insider risks extend beyond listed companies to fiduciaries and even regulatory bodies that handle market-moving data. Over the past year, SEBI has taken action against officials at the electricity regulator, executives at IndusInd Bank, and issued notices to Bank of America as well as consulting firms PwC and EY. Investigations into alleged insider trading rose to 287 cases in FY2024-25 from 175 a year earlier.
Pandey, who completed a year at the helm of SEBI, has also prioritized simplifying market access for foreign investors. The regulator has trimmed documentation requirements and aims to cut approval timelines to five days, following extensive consultations with overseas portfolio investors. SEBI is coordinating with the federal government and the central bank to harmonize rules governing foreign portfolio investment and foreign direct investment, which are currently subject to different thresholds and sectoral conditions.
On derivatives, SEBI signaled a pause after tightening norms in India’s fast-growing segment, where retail participation has surged despite widespread losses. The regulator has reduced the number of contracts and increased minimum trading sizes but stopped short of restricting small investors. Pandey said future policy changes would be data-driven and consultative, emphasizing regulatory stability over frequent shifts.
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