Insider trading in capital markets

In the last two decades tremendous growth experienced by the Indian economy in financial instruments market i.e. bond market, share market, derivative market and other markets. With the increased size and operations, scope for speculation and risk also increased, and it lead to use of internal and non-disclosed public data by the top management, policy makers and executives for the purpose of their personal gain. The process of using such data is known as insider trading. Identification of enormous frauds in the Indian and International capital markets, regulators and legislatures have increasingly turned towards making corporate governance standards mandatory and have attached penalties to violation of these corporate governance guidelines. This paper reviews the provisions in law and discusses some of the earlier incidents which were happened in Indian capital market. Insider trading in India has been of great effect in the past few years and SEBI is dealing with it in a head on manner. The New Insider Trader Regulations, 2015 is much appreciated as it deals with a wide range of problems related to Insider Trading and also has severely reduced loopholes. The New Regulations would also build up trust and confidence of the investors and reduce fraudulent practices.