The Securities and Exchange Board of India (SEBI) has tightened the insider trading rules by widening the definition of an ‘insider’ to cover any person who is a “connected person” or in possession of or having access to unpublished price-sensitive information (UPSI).The regulator has defined “connected person” as any person who is in frequent communication with the officers of a company or is in contractual, fiduciary or employment relationship with the company, among other things. A new feature that has been added is that the onus of establishing that the connected person was not in possession of UPSI would be on him. But, if the person who has been alleged with insider trading violations is not connected to the company, then the onus of proving the same would be on the SEBI.
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