SEBI Tightens Insider Trading Norms with Amendments to PIT Regulation

The SEBI (Prohibition of Insider Trading) (Third Amendment) Regulations, 2024, mark a significant overhaul to combat insider trading. 

Key changes include an expanded definition of ‘connected persons’, encompassing household members, employees, and partners, while clarifying the term ‘relatives’ to include immediate family members. 

A rebuttable presumption now assumes access to Unpublished Price Sensitive Information (UPSI) by relatives, shifting the burden of proof.

While these amendments enhance market integrity and address regulatory gaps, they may impose undue burdens on innocent individuals and small firms. 

Balancing stringent enforcement with fairness will be pivotal to achieving a transparent and equitable financial ecosystem.