India Regulator Pushes for Stricter Insider Trading Rules
SEBI is urging banks to tighten insider trading enforcement as cases rise. The regulator also plans to simplify foreign investment rules to attract capital.
The Securities and Exchange Board of India (SEBI) is intensifying its efforts to enforce insider-trading regulations, specifically targeting the protection of unpublished price-sensitive information. Tuhin Kanta Pandey, the Chair of SEBI, indicated that the push for stricter compliance extends to banks and other regulatory bodies within India.
Over the past year, the regulator has initiated actions against officials from the national electricity regulator and executives at IndusInd Bank Limited. Additionally, notices regarding potential violations have been issued to Bank of America Corporation and senior personnel at major consulting firms, including PwC and EY.
"The insiders may lie not only in companies, they may also lie in the people who have gotten information in a fiduciary capacity."
Pandey emphasized that regulatory bodies themselves must remain vigilant, as they also handle sensitive information during the course of their duties. Data highlights the scale of this crackdown, with SEBI investigating 287 cases of alleged insider trading during the 2024-25 financial year, a significant increase from the 175 cases recorded the year prior.
Beyond enforcement, the regulator is focused on streamlining entry processes for international investors. Following dozens of meetings with foreign portfolio investors, SEBI is working to reduce documentation requirements and aims to shorten the entry timeline to five days. Efforts are also underway with the federal government and the central bank to harmonize the rules governing foreign portfolio investments and longer-term strategic investments.
"The different ways in which foreign money can come in needs to be re-looked at."
This regulatory easing comes as India faces a period of weak foreign investment. In 2025, overseas portfolio investors divested $18 billion from Indian equities. While foreign direct investment rose to $4 billion between April and December 2025 compared to the previous year, it remains relatively low.
Regarding the country's rapidly growing derivatives market, Pandey signaled a period of stability following recent rule changes intended to protect retail investors. Although the head of the National Stock Exchange, Ashish Kumar Chauhan, suggested implementing minimum qualifying criteria for derivative trading, SEBI intends to monitor the impact of current policies before introducing further restrictions.
"We will be more data-driven, thoughtful, and consultative before we take further measures on this."
