What is Insider Trading ?
Insider-trading is a term
often heard by those investing in the stock market.
Though the term has a
surreptitious ring to it and stock market regulators around the globe spend
considerable time framing laws to combat this menace, it is not always an evil.
The Securities and
Exchange Board of India's (SEBI) regulation for prohibiting insider-trading
states that in its illegal form this happens when an insider buys or sells the
shares of a listed company when in possession of any unpublished
price-sensitive information.
Illegal insider- trading
in India
However, it need not be concluded that the
persons connected to the company are barred from possessing, buying and selling
its shares.
They are permitted to deal in the securities of the company,
provided they make adequate disclosure about the transaction to the regulator
and the exchanges on which the shares are listed.
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