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Spectra Forensics, Investigation Specialist

Regulatory framework · Lenders, insolvency and markets

Insider trading and market abuse inside the company

Price-sensitive information may have leaked or been traded on: what must a listed company do?

Spectra Forensics7 laws and regulators

Short answer

A listed company must have a board-approved procedure for inquiring into leaks or suspected leaks of unpublished price-sensitive information, must start that inquiry when a leak is suspected, and must inform SEBI promptly of the leak, the inquiry and its results. The structured digital database of who received the information is the starting point. Since June 2025, more events count as price-sensitive by default, including fraud, defaults, forensic audits and fund-raising, so leaks now touch investigations directly.

The landscape

Laws and regulators in play

SEBI (Prohibition of Insider Trading) Regulations 2015 (Regs 3 and 4)
Prohibit communicating unpublished price-sensitive information except for legitimate purposes, and trading while in possession of it, subject to limited defences.
SEBI PIT Regulations (Reg 3(5)): structured digital database
Requires a database of everyone with whom price-sensitive information is shared, with PAN or another identifier, time stamping and audit trails. It cannot be outsourced.
SEBI PIT Regulations (Reg 9A)
Requires internal controls against insider trading, a written policy for inquiring into leaks with prompt intimation to SEBI (9A(5)), and a whistle-blower policy for reporting leaks (9A(6)). In force since 1 April 2019.
SEBI PIT Regulations (Reg 7 and Schedule B)
Require promoters, directors and designated persons to disclose trades above ₹10 lakh in a calendar quarter within two trading days, with the company informing the exchange within two trading days; govern trading windows and contra trades.
SEBI PIT amendment of 11 March 2025
Expanded the list of events treated as price-sensitive by default, effective 9 June 2025: for example fund-raising, changes in auditors or KMP, fraud, defaults, forensic audits, resolution plans and material litigation.
SEBI (PFUTP) Regulations 2003
Prohibit manipulative and fraudulent practices, including knowingly publishing untrue information, spreading false or misleading information through any media and planting false news.
SEBI Act 1992 (ss.15G and 24)
Set penalties for insider trading of at least ₹10 lakh, up to ₹25 crore or three times the profit, whichever is higher, and criminal liability of up to ten years’ imprisonment, a fine of up to ₹25 crore, or both.

Step by step

Decision framework

  1. 01

    Contain

    Identify what information may have leaked, when, and whether it is now public. If it is not public and is price-sensitive, consider bringing forward the announcement to end the information asymmetry.

  2. 02

    Preserve

    Freeze the structured digital database entries, email and messaging for people on the list, and trading-window and pre-clearance records.

  3. 03

    Start the inquiry under the board-approved policy

    The compliance officer and audit committee run it under the written Reg 9A(5) procedure. Bring in independent investigators where senior people are on the list.

  4. 04

    Map access against trading

    Compare the database with trading records of designated persons and their immediate relatives, and with unusual trading in the stock around the leak window.

  5. 05

    Inform SEBI

    Tell SEBI promptly about the leak or suspected leak, the inquiry and, in due course, its results.

  6. 06

    Act and fix the controls

    Disciplinary action under the code of conduct, changes to who receives information, and any disclosure required under the LODR.

Duties and deadlines

Who must do what, and by when

  • Listed company

    Maintain a structured digital database of persons with whom price-sensitive information is shared, with identifiers, time stamps and audit trails.

    By whenContinuously

    SEBI PIT Reg 3(5)

  • Listed company

    Have written board-approved policies for inquiry into leaks or suspected leaks, initiate inquiries and inform SEBI promptly of leaks, inquiries and results.

    By whenOn a leak or suspected leak

    SEBI PIT Reg 9A(5)

  • Listed company

    Have a whistle-blower policy for employees to report leaks of price-sensitive information.

    By whenContinuously

    SEBI PIT Reg 9A(6)

  • Promoters, directors and designated persons

    Disclose trades exceeding ₹10 lakh in value in a calendar quarter.

    By whenWithin 2 trading days

    SEBI PIT Reg 7(2)(a)

  • Listed company

    Notify the stock exchange of the trades disclosed to it.

    By whenWithin 2 trading days of receiving the disclosure

    SEBI PIT Reg 7(2)(b)

  • Designated persons

    Not enter into a contra trade within the minimum period, unless the compliance officer grants relaxation.

    By whenAt least six months after the original trade

    SEBI PIT Schedule B

Analysis

How the regimes interact

Why this question matters

Leaks of price-sensitive information rarely announce themselves. They show up as an odd trading pattern, a press report a day early, or a whistle-blower message. SEBI has put the burden on listed companies to inquire and report, and its surveillance increasingly starts from the company's own structured digital database. A company that cannot show who knew what, and when, will struggle to defend itself or its people.

How the regimes interact

Prevention, inquiry and enforcement sit in different places. The PIT Regulations prohibit sharing and trading, require the database and the leak-inquiry procedure, and govern trading disclosures. PFUTP covers the wider space of manipulation, including spreading false or misleading information. The SEBI Act supplies the penalties and criminal liability. A single leak can be examined under all three.

Investigations create insiders. The 2025 amendment made fraud, defaults and forensic audits presumptively price-sensitive. That joins this guide to the others on this site: when a company starts a forensic audit or receives an auditor's fraud report, the people working on it hold price-sensitive information, and a listed company may also have a disclosure under the LODR. Add investigation teams and external advisers to the database from day one.

The whistle-blower channel is part of the system. Regulation 9A(6) requires a channel for reporting leaks, and SEBI's informant mechanism protects employees who report insider trading to SEBI directly, with rewards for information that leads to recovery. A company that handles internal leak reports well is less likely to learn about them first from the regulator.

How Spectra Forensics can help

We run leak inquiries and insider-trading investigations combining digital forensics, trading and transaction analysis and independent investigation. Speak to us in confidence.

Warning signs

Red flags

  • Unusual volume or price movement before an announcement that few people knew about.
  • News reports of a deal or result before the board has approved it.
  • Database entries made after the fact, or external advisers missing from it.
  • Trades by relatives of designated persons shortly before results.
  • Information shared over personal messaging rather than company systems.
  • Repeated requests for trading-window relaxations by the same people.

Checklist

What good looks like

  • A live, complete structured digital database, including external advisers, reviewed by the compliance officer.
  • A written leak-inquiry procedure that names who investigates when senior people are involved.
  • A process to record externally sourced price-sensitive information promptly.
  • Trading surveillance that compares database access with trades by designated persons and relatives.
  • A template for the SEBI intimation, with an owner and a target time.
  • Training that covers the expanded 2025 list of price-sensitive events, especially fraud and forensic audits.

Myths and corrections

Common misreadings

Misreading

If nobody traded, a leak does not matter.

Better reading

Communicating price-sensitive information without a legitimate purpose is itself prohibited, and the company must inquire into leaks and inform SEBI whether or not anyone traded.

Misreading

Forensic audits and internal investigations are not price-sensitive.

Better reading

Since June 2025, fraud, defaults and forensic audits are among the events presumed to be price-sensitive. People on an investigation team may need to be in the database.

Misreading

The trading window must close for a fixed period every quarter.

Better reading

Schedule B allows closure from the end of each quarter until 48 hours after results; the company decides how to apply it, and windows may also close around other events involving price-sensitive information.

For the board pack

Takeaways

  • 01A suspected leak triggers a written inquiry and prompt intimation to SEBI, whether or not anyone traded.
  • 02The structured digital database is the first piece of evidence; keep it complete and contemporaneous.
  • 03Investigations into fraud now generate price-sensitive information, so treat the investigation team as insiders.
  • 04Independent investigators are needed where senior management is on the list.

Questions we are asked

What is unpublished price-sensitive information?

Information about a company or its securities, not generally available, which is likely to materially affect the price if it becomes available. The PIT Regulations list events presumed to be price-sensitive, such as financial results, dividends, mergers, changes in key personnel and, since June 2025, fund-raising, fraud, defaults, forensic audits and resolution plans, among others.

Who runs a leak inquiry?

The company’s board-approved policy decides. Commonly the compliance officer leads under the audit committee’s oversight, with external investigators where the people with access include directors or senior management.

What penalties apply to insider trading?

Under section 15G of the SEBI Act, a penalty of at least ₹10 lakh, which may extend to ₹25 crore or three times the profit made, whichever is higher. Criminal prosecution under section 24 can lead to imprisonment of up to ten years, a fine of up to ₹25 crore, or both.

Sources

  1. SEBI (Prohibition of Insider Trading) Regulations 2015, last amended 12 March 2025 link
  2. SEBI (Prohibition of Insider Trading) (Amendment) Regulations 2018, notified 31 December 2018 link
  3. SEBI, FAQs on the PIT Regulations, April 2025 link
  4. SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations 2003 link
  5. Securities and Exchange Board of India Act 1992, ss.15G and 24 link

This guide is general information on the law as stated above, not legal advice. Facts change outcomes; take advice on your own matter.

Go deeper

Further reading

Digital forensics20 Sept 2026

Preserving Digital Evidence in Internal Investigations: Imaging, Hashing and Chain of Custody

A practical guide to preserving laptops, phones, email and cloud data in an internal investigation so the evidence stays reliable, lawful and usable in court.

Whistleblowing3 Aug 2026

How to Investigate a Whistleblower Complaint: A Step-by-Step Guide for Indian Companies

A practical, step-by-step guide to investigating whistleblower complaints in India: triage, independence, evidence, interviews, DPDP and reporting.

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