Reporting Suspected Insider Trading

11. Reporting suspected insider trading

The informant framework, effective from 26 December 2019, allows voluntary reporting of suspected past, ongoing or reasonably anticipated insider-trading violations. Reporting does not require reward eligibility.

For rewards, original information must come from independent knowledge or analysis, be specific and credible, and help SEBI start, assist, reopen or widen an inquiry. It must be unknown to SEBI unless the informant was its original source. Repeating news, official reports or public proceedings is insufficient unless the informant originated the information. Independent analysis of public material can qualify if it reveals analysis unknown to SEBI.

Protected professional or confidential communications are excluded under the referenced evidence-law rules. Reporting is voluntary when it precedes a relevant official request, inquiry or demand. To meet the stated timeliness condition, the completed form must reach SEBI within three years of the first alleged illegal trade.

Reports use Schedule D, submitted to SEBI’s Office of Informant Protection directly or through an authorised lawyer practising in India. Direct submissions may require personal identity and truthfulness checks.

The form asks about the securities, UPSI, publication date, evidence of suspects possessing it, suspects’ identities, trades and relevant relationships. It also asks about previous SEBI communications and internal reporting. Relevant documents must be self-certified. Information revealing the informant’s identity should be removed or flagged if removal is impossible.

A lawyer verifies identity, preserves confidentiality subject to SEBI’s requirements, certifies accuracy and completeness, and obtains irrevocable consent to supply the original form. The submitted copy removes identifying details while retaining representative and allegation details. The original must be supplied within seven calendar days of SEBI’s request.

Schedule D also requires a declaration that information is truthful and complete and was not obtained from the excluded source categories under regulations 7G(2) and 7G(6). These concern specified regulatory, surveillance and law-enforcement roles, and people obliged to report. The signer agrees to indemnify SEBI—compensate it if the declaration is found untrue. This commitment is separate from disqualification and legal action for deliberate falsehoods or false documents.

The Office registers reports and passes evidence to the relevant SEBI division. SEBI need not explain examination, action or rejection. Earlier internal reporting, or later reporting by a compliance officer, does not itself prevent reward eligibility.