Now SEBI is going to act more strictly in the cases of insider trading. Market regulator SEBI will now involve big groups in the case of insider trading. This will now also include ‘connected persons’ and ‘relatives’. In simple words, now if an investigation is being conducted against a person for insider trading, then other people associated with him (‘connected persons’ and ‘relatives’) can also be made a part of the investigation. The reason for this decision is that it will become easier to identify people possessing unpublished price sensitive information.
who will attend
According to the report of CNBC TV18, till now only the family members came under the ambit of investigation. But now along with the family, business partners, employees of the company or the person living in the house of the person against whom the investigation is going on will also come under its purview.
Also read: Company invested by Ashish Kacholia, Mukul Aggarwal applies for IPO
What will be the definition of relatives?
The circle of relatives has also increased. Relatives now include the individual’s spouse, parents (including in-laws), siblings (and their spouses) and children (and their spouses). SEBI has made it clear that investors who are following the rules should not be worried about this new rule.
There are different opinions among experts regarding the new changes. Some believe that the new law will expand the scope of investigation to more people. This can sometimes create confusion. And the person who is guilty can escape. At the same time, some say that this will help in reaching the right people.