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June 14, 2026
The Dispatch

Definition

Insider Trading

Insider trading is the illegal practice of buying or selling securities based on material, non-public information about a company.

If a company insider (or anyone with access) trades on unpublished price-sensitive information (UPSI), such as upcoming results, a merger, or a large order, before it is public, it is insider trading, prohibited under SEBI's PIT Regulations, 2015.

Listed firms must maintain a structured digital database of UPSI, enforce trading windows that close before results, and require pre-clearance for designated persons. SEBI uses surveillance and call-data analysis to detect it, and penalties include heavy fines, disgorgement, and market bans.

Related terms

  • SEBI LODRSEBI LODR (Listing Obligations and Disclosure Requirements) are the regulations governing what listed companies must disclose to shareholders and exchanges.
  • SEBISEBI is the Securities and Exchange Board of India, the statutory regulator of the securities markets, protecting investors and overseeing exchanges, intermediaries and listed companies.
  • Front RunningFront running is when someone trades ahead of a known large order, exploiting the price impact that order will create.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.