Insider is defined under the SEBI Prohibition of Insider Trading regulation2(e) as. For free flow of information and avid information asymmetry.To have level playing field for all the participants in the market.*Prohibition of insider trading is necessary to make securities market. * Section11(2)E of companies act,1956 prohibits the insider trading but does not define it. The prevention of insider trading is widely treated as an important function of securities regulation. It is fairly a breach of fiduciary duties of officers of a company or connected persons towards the shareholders. Insider trading denotes dealing in a company’s securities on the basis of confidential information relating to the company which is not published or not known to the public used to make profit or loss.
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