Insider trading is the trading of a Listed company’s stock or other securities based on Unpublished Price Sensitive Information (UPSI) about the company. As a measure to prevent insider trading, SEBI, the securities market regulator, through its regulations, prohibits the communication of UPSI; except in furtherance of legitimate purposes, performance of duties or discharge of legal obligations.
In the recent years, as the need to regulate the persons handling and possessing UPSI became critical to prevent & prosecute insider trading acts, SEBI introduced significant amendments to enhance compliance related to prevention of Insider Trading. To this effect the requirement for maintenance of Structured Digital Database has been introduced to create a database of such persons or entities with whom UPSI is shared.