What Is Insider Trading and How does SEBI Deals with It?

Insider trading includes trading in a public company by someone who has confidential, price sensitive information, and who uses and deals with such information. Insider trading can either be illegal or legal depending on the knowledge, based on which the individual is trading. According to section 2(h)(ha) of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992[i] ‘price sensitive information’ means any information relating to present, future or even past, that has the potential to affect the prices of securities and value of the company.

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Impact of Capital Market on India

The Indian capital market played a vital role in saving mobilization in the year 1950. During the period of 1960-1980, the importance of the capital market was diminished and during the same time as a proportion of national income, the domestic savings were increased from 13%- 22%. From the capital market amount fund was raised up to 13% of net domestic saving. 

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Regulation of Companies: Raising of Capital Issue of Prospectus

Raising of capital refers to the process of procuring capital funds that are undertaken by companies, governments, etc. Companies may raise capital either by means of a debt instrument or through the issuance of shares. Depending upon the structure of a company, the method of raising capital generally varies. Factors that affect the raising of capital by a corporate include management structure, governance and quality, strategies, and the purpose and funding requirements of the company.

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