Question

A director of a listed company learns, in a board meeting, of an impending merger - unpublished price sensitive information - and then TELLS his friend, who trades in the company's shares before the announcement. Under the SEBI (PI

Q: Answer-A director of a listed company learns, in a board meeting, of an impending merger - unpublished pric...

The SEBI PIT Regulations, 2015 prohibit not only trading while in possession of UPSI Regulation 31 but also COUNSELLING or COMMUNICATING UPSI to another person Regulation 32 read with 33, and prohibit inducing another to trade on it. The director who tips his friend is squarely within the communication prohibition, irrespective of whether he traded or profited. Tipping is a recognised insider-trading violation. Casual conversation is no defence where UPSI is knowingly communicated. This is the core anti-tipping scenario.