Previous Year Question

Here, Inside Trading refers to the concept of Insider Trading. Insider Trading is directly related to the securities/share market.

When a person trades in the securities of a listed company while possessing Unpublished Price Sensitive Information (UPSI) that is not available to the general public and could materially affect the price of the securities when made public, the activity falls within the insider-trading framework.

SEBI regulations prohibit an insider from dealing in listed securities while in possession of unpublished price-sensitive information.

Depending on the circumstances, such price-sensitive information may include financial results, dividend decisions, issue of securities, mergers, acquisitions and major expansion plans.

For example, if an officer of a company knows before a public announcement that the company's profits are going to change substantially and buys or sells shares on the basis of that non-public information, an insider-trading concern may arise.