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    Question

    How can a person accused of insider trading defend

    themselves as per the provisions of SEBI (Prohibition  of  Insider  Trading) Regulations, 2015?
    A By demonstrating that they did not have possession or access to unpublished price-sensitive information. Correct Answer Incorrect Answer
    B By proving that they were not aware of the information's price sensitivity. Correct Answer Incorrect Answer
    C By showing that they did not trade or that their trading falls within exonerating circumstances. Correct Answer Incorrect Answer
    D Only A and C Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    As per Reg 2- "insider" means any person who is: i) a connected person;or ii) in possession of having access to unpublished price sensitive information; NOTE:Since “generally available information” is defined, it is intended that anyone in possession of or having access to unpublished price sensitive information should be considered an “insider” regardless of how one came in possession of or had access to such information. Various circumstances are provided for such a person to demonstrate that he has not indulged in insider trading. Therefore, this definition is intended to bring within its reach any person who is in receipt of or has access to unpublished price sensitive information. Theonus of showing that a certain person was in possession of or had access to unpublished price sensitive information at the time of trading would, therefore, be on the person leveling the charge after which the person who has traded when in possession of or having access to unpublished price sensitive information may demonstrate that he was not in such possession or that he has not traded or or he could not access or that his trading when in possession of such information was squarely covered by the exonerating circumstances.

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