Changing Contours of Unpublished Price Sensitive Information: The 2025 Amendment to India's Insider Trading Framework
SECURITIES LAWGUEST SUBMISSIONS
Krishaal Morjaria and Snigdha Ghose
4/10/20269 min read
I. Introduction
The Securities and Exchange Board of India (“SEBI”) notified the Securities and Exchange Board of India (Prohibition Of Insider Trading) (Amendment) Regulations, 2025[1] (the “UPSI Amendment Regulations”) in the Official Gazette on 11 March 2025, which came into effect from 10 June 2025.
Amongst other things, the Amendment Regulations revise the definition of Unpublished Price Sensitive Information (“UPSI”) under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”), to expand the illustrative list of events that are ordinarily considered to be UPSI, by adding certain new events, with the underlying motive to aim at greater clarity, certainty and uniformity in compliance in the ecosystem.[2] The intervening period provided between the notification of the Amendment Regulations and their coming into effect were helpful to provide companies with a transition window to align their internal policies and compliance frameworks with the revised scope of UPSI.
This blog aims at not only discussing the history of the Amendment Regulations, but also questions arising with respect to the operation and consequence of the newly added items, which can still affect the market in varied ways.
II. UPSI and its interplay with disclosure requirements under listing regulations
UPSI is what lies at the core of India’s insider trading regime[3]. Generally, it may be described as non-public information which, on becoming generally available, would materially affect the price of securities to which it relates. [4] When UPSI arises, certain obligations with respect to the listed company’s structured digital database (“SDD”) and a notional ‘trading window’ arise. The PIT Regulations accordingly contain conditions on communication and inducement of communication of UPSI.
The drafters of the PIT Regulations deemed it necessary to include examples of information that are ordinarily regarded as UPSI, as an illustrative list, to the end that no piece of information is ordinarily considered to be UPSI.[5] This included information such as such as financial results, mergers, and corporate restructuring. In addition and notably for the purpose of this blog, the definition also included “material events in accordance with listing agreement”.
The listing agreements are replaced by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “SEBI LODR”), which sets out disclosure requirements under its Regulation 30 read with Schedule III. These regulations set out 2 kinds of events: (a) events that require disclosure without any application of the guidelines of materiality under SEBI LODR: and (b) events that require disclosure upon application of the guidelines of materiality under SEBI LODR. The definition accordingly deemed to include events that are deemed to be material or assessed to be material, as the case may be, as per SEBI LODR. However, in 2018 the Committee on Fair Market Conduct (“FMC”), constituted by SEBI, was of the view that all material events that are required to be disclosed as per SEBI LODR may not be UPSI under the PIT Regulations. Thus, based on the recommendation of the FMC, the definition of UPSI was amended to remove the explicit inclusion of “material events in accordance with the listing agreement” in the illustrative list of items, with effect from April 01, 2019.[6]
Subsequently, a study conducted by SEBI along with stock exchanges, revealed that, after the April 01, 2019 amendment, by and large, companies were categorizing only the items explicitly mentioned in PIT Regulations as UPSI. The market feedback also suggested that most companies consider this to be a ‘uniform practice’. Due to this, SEBI felt the need to amend the definition of UPSI.[7]
To this end, the SEBI’s May 18, 2023 consultation paper (“Consultation Paper”) proposed reinstating reference to all material disclosure events under Regulation 30 of SEBI LODR. However, public feedback to the Consultation Paper emphasized that: (a) all Regulation 30 events should not automatically qualify as UPSI; and (b) the list of items considered to be UPSI ‘ordinarily’ may be expanded instead, in the alternative.
Thereafter, a working group reviewed Schedule III of SEBI LODR and, considering public feedback, recommended the above events which were adopted through the UPSI Amendment Regulations.
Given this context, it is time to look at the UPSI Amendment Regulations in detail, and their impact in a fast-changing, information-driven market.
III. Elucidating the 2025 Amendment: SEBI’s Recalibration of UPSI
The Amendment Regulations introduce, inter alia, the following material changes:
a. Addition of 12 deemed material events from Part A and Part B of Schedule III to the SEBI LODR,[8] including:
award or termination of order/contracts not in the normal course of business;
change in rating(s), other than ESG rating(s);
fund raising proposed to be undertaken;
agreements, by whatever name called, which may impact the management or control of the company;
fraud or defaults by the company, its promoter, director, key managerial personnel, or subsidiary or arrest of key managerial personnel, promoter or director of the company, whether occurred within India or abroad;
resolution plan / restructuring or one time settlement in relation to loans / borrowings from banks / financial institutions;
admission of winding-up petition filed by any party / creditors and admission of application by the Tribunal filed by the corporate applicant or financial creditors for initiation of corporate insolvency resolution process against the company as a corporate debtor, approval of resolution plan or rejection thereof under the Insolvency and Bankruptcy Code, 2016;
initiation of forensic audit, by whatever name called, by the company or any other entity for detecting mis-statement in financials, misappropriation / siphoning or diversion of funds and receipt of final forensic audit report;
action(s) initiated or orders passed within India or abroad, by any regulatory, statutory, enforcement authority or judicial body against the company or its directors, key managerial personnel, promoter or subsidiary, in relation to the company;
outcome of any litigation(s) or dispute(s) which may have an impact on the company;
giving of guarantees or indemnity or becoming a surety, by whatever named called, for any third party, by the company not in the normal course of business;
granting, withdrawal, surrender, cancellation or suspension of key licenses or regulatory approvals.
b. It is clarified under Explanation 2 that SEBI’s materiality guidelines[9] as listed in Regulation 30 of the SEBI LODR must be referred to, to decide whether events count as UPSI or not. The SEBI board agenda approving the Amendment Regulations explains that the intent was to introduce threshold limits for events drawn from Para B of Part A of Schedule III (i.e., (a), (j), (k), (l)). This is helpful to identify where do materiality thresholds apply, and where they do not, as the UPSI Amendment Regulations themselves do not clarify this aspect.
c. Few procedural nuances introduced by the amendment includes provision(s) whereby:
The listed company has a 2 calendar days window period to add the UPSI into the SDD.
Mandatory trading window closure is not required if UPSI does not originate internally.
IV. UPSI definition remains both expansive and illustrative
The N.K. Sodhi Committee Report, while discussing the intent of the definition of UPSI, that there is no bright line for determination of what information is price sensitive, and determination is on subjective basis, including for the specific items set out in the definition, which are illustrative for guidance. [10]
Similarly, The Frequently Asked Questions (FAQs) with respect to the Structured Digital Database (SDD) under the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015 issued by BSE Limited and National Stock Exchange of India Limited (the “FAQs”) amongst other things provide guidance on when and how an entry in respect of any information should be made in the SDD. In terms of when an information starts taking the shape of UPSI, for SDD entry, it provides the definition is considered to be illustrative. Further, any non-public information takes shape of UPSI when: (i) it is price sensitive; and (ii) the probability of going ahead with the information is higher than not going ahead.
As such, the list of events that ordinarily constitute UPSI remains illustrative, not exhaustive. Information outside the events listed under the definition may still be UPSI if it is non-public and materially price sensitive.
Conversely, while the list is now expanded, a view may be taken that it is not necessary that each event in the illustrative list will be deemed UPSI by virtue of its presence in the list. This is because, treating the list as illustrative has historically been the approach of SEBI and its appellate authority, the Securities Appellate Tribunal (“SAT”).
For instance, when it comes to financial reports (which is present in the illustrative list), SEBI has observed that the existence of UPSI is a rebuttable presumption which may be refuted.[11]
Similarly, when it comes to mergers and acquisitions, SEBI and SAT have also looked at the likelihood of the information being acted upon while determining whether it is UPSI. Typically, the period of UPSI is said to only commence from the time when it can be reasonably inferred that the probability of the transaction going through is high and not from the initial steps of any transaction / deal, which are exploratory and uncertain in nature.[12]
V. Implications and Consequent Recommendations
The twelve events referenced under the amended framework continue to operate as an illustrative aid in identifying UPSI, a position that was well recognised even prior to the amendment. In this sense, the changes serve more as a reinforcement of existing regulatory expectations rather than the introduction of a new compliance standard.
From a practical perspective, deal teams, advisors and other insiders involved in transactions may nevertheless consider reviewing their existing internal processes, such as pre-trade clearance mechanisms, restricted lists and wall-crossing protocols to ensure that they remain consistent with the clarified regulatory articulation, including in relation to the timing at which information may assume the character of UPSI, for alignment and internal clarity.
Similarly, listed entities and intermediaries should revisit their codes of conduct framed under the PIT Regulations to ensure coherence with the amended language. Periodic training and sensitisation of promoters, directors, key managerial personnel and other designated persons continues to play a critical role in effective compliance, especially in enabling individuals to recognise fact-specific situations where information, though not expressly enumerated, may nevertheless qualify as UPSI.
VI. Conclusion
The UPSI framework in India is unique in its implementation, as the major onus of compliance is upon the listed entity. The definition of UPSI, being subjective and expansive, has resulted in differences of interpretation. The Amendment Regulations appear to be with the intent of providing further regulatory clarification for listed entities, and towards the end of bringing uniformity and alignment. However, the reliance on an illustrative list continues, and the determination of UPSI cannot be reduced to a closed or exhaustive enumeration. Even prior to the amendments, information not expressly listed could qualify as UPSI depending on its materiality and the context in which it arose.
While questions surround the framework, including regarding the precise point in time at which information crystallises into UPSI remain central to insider trading analysis, this issue is not novel to the amended framework. Considerable judicial and regulatory guidance also already exists on these aspects, with courts and SEBI consistently emphasising a fact-specific assessment rather than a rigid temporal threshold.
Viewed holistically, the significance of the UPSI Amendment Regulations lies in their emphasis on internal governance and information control, rather than in the creation of new substantive obligations. By reaffirming established principles under the UPSI framework, what the amendment achieves is to preserve doctrinal continuity within Indian insider trading law. Their practical value is therefore found in encouraging clearer internal processes, heightened awareness among designated persons, and more consistent application of long-standing legal standards, rather than in redefining the scope of insider trading liability.
[3] https://www.sebi.gov.in/sebiweb/about/AboutAction.do?doBoardMeeting=yes&year=2024 (board meeting dated December 18, 2024)
[4] https://www.sebi.gov.in/sebiweb/about/AboutAction.do?doBoardMeeting=yes&year=2024 (board meeting dated December 18, 2024)
[5]https://www.sebi.gov.in/sebi_data/attachdocs/1386758945803.pdf; https://www.sebi.gov.in/legal/regulations/dec-2018/securities-and-exchange-board-of-india-prohibition-of-insider-trading-amendment-regulations-2018-dated-december-31-2018_41570.html
[6] https://www.sebi.gov.in/sebiweb/about/AboutAction.do?doBoardMeeting=yes&year=2024 (board meeting dated December 18, 2024)
[7] https://www.sebi.gov.in/sebiweb/about/AboutAction.do?doBoardMeeting=yes&year=2024 (board meeting dated December 18, 2024)
[8] Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [Last amended on July 25, 2022], https://www.sebi.gov.in/legal/regulations/jul-2022/securities-and-exchange-board-of-india-listing-obligations-and-disclosure-requirements-regulations-2015-last-amended-on-july-25-2022-_61405.html
[9] https://www.sebi.gov.in/sebi_data/attachdocs/nov-2022/1668240795810.pdf
[10] https://www.sebi.gov.in/sebi_data/attachdocs/1386758945803.pdf
[11] In re: Surjit Kumar Gupta and others in the matter of Havells India Limited (SEBI order no. JA/KS/IVD/ID4/27867/2023-24 decided on 28 June 2023)
[12] In re: Mr. Gautham Lokhande and Mr. Ajay Kalia in the matter of DLF Limited (SEBI Order No. Order/SM/AD/2022-23/ 20862-20863 dated 31 October 2022); Alpana R. Kirloskar and Others v. SEBI (SAT Appeal Nos. 44, 499, 503, 504, 505, 506, 507 and 508 of 2020 decided on 12 October 2022); In re: Keyur Maniar and Ramit Chaudhari in the matter of Insider Trading activities of Certain Entities in the scrip of Infosys Limited (SEBI order no. WTM/AN/IVD-1/ID16/31148/2024-25 dated 31 January 2025).
About the Author
Krishaal Morjaria is a Principal Associate at Shardul Amarchand Mangaldas & Co. and Snigdha Ghose is a fourth year law student at Gujarat National Law University, Gandhinagar.
Editor
Soumyabrata Chakraborty, Managing Editor.