On March 15, 2025, the Securities and Exchange Board of India (SEBI) announced crucial amendments to the Prohibition of Insider Trading Regulations, 2015. These changes, which came into force from June 10, 2025, aim to strengthen transparency, align Indian regulations with global standards, and prevent misuse of Unpublished Price Sensitive Information (UPSI).
In this article, we explore:
🔍 What’s changed
🧠 Why it matters
🛠 Practical implications for businesses
✅ Action points for compliance
🎯 A thoughtful conclusion on what this means for market integrity
UPSI (Unpublished Price Sensitive Information) refers to confidential company information that can materially impact a company’s stock price if disclosed publicly.
Prior to the amendment, the definition of UPSI was relatively narrow and interpretative, leaving room for ambiguity and selective disclosures. To reduce misuse and improve corporate governance, SEBI expanded the definition of UPSI to include a broader range of events and circumstances.
The revised regulations specify the following new categories of UPSI:
📝 Awarding or termination of contracts not in the ordinary course of business
🧑💼 Resignation of statutory or secretarial auditors due to concerns like fraud or mismanagement
🧮 Any change in credit rating, except for ESG ratings
📊 Proposed fundraising through rights issues, FPOs, QIPs, etc.
🤝 Strategic agreements or changes in control/management
💥 Defaults, frauds, or arrests of key personnel
🧑⚖️ Outcomes of legal proceedings with potential financial/material impact
🧪 Initiation or conclusion of forensic audits
🏦 Admission into corporate insolvency proceedings
🛡️ Granting or suspension of key licenses, registrations, or approvals
🧾 Orders or actions by regulators, courts, or tribunals that could influence business outcomes
🔐 Provision of guarantees, indemnities, or sureties outside regular operations
Prior to this update, compliance teams had to interpret materiality without clear event lists. This amendment removes guesswork by mapping UPSI categories directly to Regulation 30 of SEBI’s LODR (Listing Obligations & Disclosure Requirements).
The move parallels global regimes like:
🇪🇺 EU’s MAR (Market Abuse Regulation): Demands broad and timely disclosure
🇺🇸 US SEC Rule 10b-5: Penalizes trading based on any material non-public information
Listed companies and intermediaries need to reassess and align their compliance frameworks to accommodate these changes. Here's how:
🔄 Update Code of Conduct, UPSI policies, and SOPs to incorporate the new list of events
✍️ Include new definitions in employee handbooks and insider trading prevention protocols
📅 UPSI sourced from external parties (law firms, consultants, regulators) must now be logged in the SDD within 2 calendar days
🔐 Enhance access controls and audit trails to maintain robust records
⛔ Internal UPSI still requires closure of the trading window
✅ External UPSI (e.g., court order) may not need window closure unless it becomes internalized
👥 Conduct training sessions for KMPs, compliance staff, and insiders
🧾 Share documented case studies or scenarios explaining what now qualifies as UPSI
Even with an expanded list, determining materiality or distinguishing routine vs. non-routine events remains partly judgment-based.
Identifying whether UPSI originated internally or externally can become a grey area and may lead to errors in handling SDD or trading windows.
Companies using manual or outdated digital systems for UPSI tracking must upgrade their tech stacks to avoid non-compliance and ensure traceability.
| Jurisdiction | Key Feature | Similarity |
|---|---|---|
| 🇪🇺 EU (MAR) | Broad UPSI list + immediate disclosure | ✅ High |
| 🇺🇸 USA (SEC) | Principle-based, case-by-case | ⚠️ Moderate |
| 🇬🇧 UK (FCA) | Mix of specificity & materiality test | ✅ High |
| 🇮🇳 India (SEBI 2025) | Event-driven + materiality | ✅ Balanced |
Here's a 5-point checklist for corporate secretaries and compliance heads:
| ✔️ Task | 🎯 Objective |
|---|---|
| 📄 Revise UPSI policies | Reflect the new categories |
| 🔒 Update SDD systems | Ensure tracking of external UPSI |
| 📅 Review trading window SOPs | Adjust for external UPSI |
| 🧠 Train insiders | Ensure awareness across levels |
| 🧾 Document interpretations | Justify decisions in gray areas |
SEBI’s 2025 amendments to the Insider Trading Regulations are a milestone in India’s market reform journey. By expanding the definition of UPSI and streamlining compliance mechanics, SEBI sends a strong message: transparency and trust are non-negotiable.
These changes demand more than just legal tweaks—they require a strategic overhaul of compliance culture, digital tools, and internal communication. Companies that act now not only reduce their regulatory risk but also gain a reputational edge as responsible market players.
As the Indian capital market matures, SEBI’s proactive stance ensures that corporate governance keeps pace with global best practices. The road ahead may involve more scrutiny, but with that comes greater investor confidence, stability, and long-term growth.
Created & Posted By Nishu Sharma