An insider in the context of insider trading refers to someone who has access to confidential, non-public information about a company.

Insiders are typically individuals who have a close relationship with the company and its operations,giving them insights that the public doesn't have.

Examples of Insiders often include:

• Top-level executives like CEOs, CFOs, COOs, and other senior management who have access to crucial financial and strategic information.
• Board members who have insights into the company's overall direction, decisions, and performance.
• Employees who might have access to sensitive information, such as financial results, upcoming product launches, mergers, acquisitions, or other important business developments.
• Business partners who work closely with the company, such as suppliers, consultants, or contractors, may have access to valuable information.
• Major shareholder who holds a significant stake in the company and might have access to inside information through their ownership positions or involvement in the company's decision-making.

For Companies:

• Educate employees about insider trading and enforce clear policies.
• Maintain restricted lists and pre-clearance procedures for trading.
• Implement blackout periods around major events.
• Limit access to sensitive information and protect whistle-blowers.

For Individuals:

• Understand insider trading laws and only trade based on public information.
• Follow company policies, including pre-clearance and blackout periods.
• Avoid discussing non-public information with others.

For Regulatory Bodies:

• Strengthen penalties and enhance detection methods for insider trading.
• Educate the public, investors, and companies about the consequences.
• Use technology to monitor trading patterns and cooperate with others to prevent insider trading.

• Regulations: SEBI has established clear regulations against insider trading. The SEBI (Prohibition of Insider Trading) Regulations, 2015, provide a comprehensive framework to prevent and regulate insider trading activities.
• Code of Conduct: Companies must have a Code of Conduct for insiders, outlining trading restrictions.
• Disclosure: Companies must report insider trades promptly to SEBI.
• Trading Window: Insiders can only trade during specified open windows.
• Pre-Clearance: Insiders are required to obtain pre-clearance from the compliance officer before executing any trades.
• Penalties: SEBI has the authority to impose substantial penalties and legal action against those found guilty of insider trading.
• Surveillance: SEBI conducts surveillance of trading activities to identify unusual patterns that may indicate insider trading.
• Awareness: SEBI educates about insider trading risks.
• Market Monitoring: Advanced tech helps identify unusual activities.

Insider trading is punishable u/s 15G of the SEBI Act, 1992. The penalty is as follows:

An insider shall be liable to a penalty which shall not be less than ` 10 lakhs but which may extend to ` 25 Crores or 3 times the profits out of insider trading, whichever is higher.

Essentially, insider trading involves trading in a public company's stock by someone with non-public, material information about that stock. Insider trading is illegal, but if an insider trades their holdings and reports it properly, it is an insider transaction, which is legal.

Designated Individuals and their next of kin are banned from contacting directly or indirectly with any person or granting any access at any time, except for the pursuit of 'legitimate goals, the execution of obligations, or compliance with legal obligations.

Insider trading by a designated person or their close associates is forbidden at all times.

According to SEBI laws, a Designated Person who buys or sells any number of the company's stocks may not engage in a contrary transaction within six months of the date