We have asked firms to submit full list of ‘insiders’: SEBI chief

T.C.A. Srinivasa RaghavanShishir SinhaN. S. Vageesh Updated - March 12, 2018 at 01:44 PM.

SEBI Chairman U.K. Sinha

The Securities and Exchange Board of India has decided to expand the list of ‘insiders’, or people privy to sensitive information in a company.

At the same time, it feels getting access to phone call data records will give it more power and ammunition to curb insider trading and price manipulation.

In an exclusive interview to

Business Line, SEBI Chairman U. K. Sinha said: “We have asked each company to tell the exchanges who are insiders. Instead of an enquiry being done by SEBI and then asking the company to give the list of insiders and then matching who can be an insider or not, we will use this detailed list.”

Trigger point

At present, companies just give a list of key persons. With the expansion, the new list will have not just chief executive officers, chief financial officers and other top officials but also people from various departments (accounts/treasury) who are privy to certain inside information. The whole process is expected to be completed in the next three-six months.

How will the system work? And what will be trigger point for an insider-trading probe?

Sinha said: “It depends upon what logic or parameters you build into the system. I am answering this question specifically on the issue of insider trading. So, if somebody’s name comes up as an insider in company X, and if he buys or sells shares of that company X, then an alert will be generated.”

“So, he may or may not be committing other offences, but so far as insider trading is concerned, even if he is buying or selling just one share of that particular company, or an allied company, an alert will be raised. Then, we will start our investigation.”

The enquiry will focus on whether trade has been done in a logical manner or on the basis of some information the person was privy to.

Phone Call Record

After the Rajat Gupta trial in the US (in which phone call records played a crucial part), the Indian regulator is pitching hard to get access to phone call record data.

“If two people say they do not know each other and if SEBI can prove that they have talked to each other 20 times a day, it adds tremendous value in our case. Unfortunately, it has not been done yet, but I hope it will be done. If it happens, I will have greater power and ammunition in dealing with market manipulation and insider trading,” Sinha explained.

> Shishir.sinha@thehindu.co.in

Published on August 22, 2012 16:35
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