The SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2025, notified on March 11, 2025, and effective from June 9, 2025, marks another major regulatory step in India’s evolving capital market framework. Designed to enhance transparency and curb information asymmetry, this amendment brings in sharper definitions and tighter timelines.
This reform builds upon the groundwork laid by the 2024 amendment, which was primarily procedural—emphasizing digital databases, record maintenance, and accountability of compliance officers. However, the 2025 update shifts focus towards expanding the scope of Unpublished Price Sensitive Information (UPSI) and updating disclosure timelines, indicating a deeper and more nuanced approach to corporate transparency.
What Has Changed in 2025?
Broader Definition of UPSI
The 2025 amendment significantly broadens the definition of UPSI, reflecting SEBI’s intent to capture more real-time events that could materially impact share prices. Key inclusions are:
- Award or termination of contracts not in the ordinary course of business
- Changes in credit ratings (excluding ESG-related ratings)
- Proposals for fund-raising activities
- Occurrence of fraud or default by the company, its promoters, directors, KMPs, or subsidiaries
- Arrest of KMPs or promoters, either in India or abroad
- Litigation outcomes or disputes that may materially affect the company
This expanded scope aims to minimize grey areas and ensure that all relevant stakeholders receive material information simultaneously.
New Timeline for Structured Digital Database (SDD) Entries
One of the standout features of the amendment is the introduction of a 2-calendar-day window for recording UPSI in the Structured Digital Database (SDD), in cases where the UPSI does not originate from the listed entity.
This ensures timely documentation and minimizes chances of insider misuse. Prior to this, no specific deadline existed for such entries, making enforcement ambiguous and inconsistent.
Trading Window Closure – Now More Flexible
In a practical move, the amendment removes the requirement to close the trading window for UPSI that doesn’t emanate from the listed company. This allows businesses to maintain market efficiency, especially when the UPSI is incidental and not reflective of the company’s internal operations.
Why It’s Important for Listed Companies
These changes bring clarity and structure to the treatment of UPSI. Here’s why listed companies must pay attention:
- Expanded definitions mean expanded responsibility. Companies now need to train internal teams to identify new types of UPSI.
- Stricter timelines require faster internal coordination. Compliance departments must be proactive and well-equipped.
- Regulatory scrutiny will increase. With clear guidelines, enforcement becomes easier—and any delays or failures will be more visible.
- Investor confidence is at stake. Transparent practices can build or erode trust in a highly sensitive trading environment.
Looking Back: 2024 vs. 2025
The 2024 amendment laid the groundwork for enhanced record-keeping and SDD infrastructure. It focused largely on building compliance processes.
In contrast, 2025 takes a substantive leap—it goes beyond the “how” and addresses the “what”. The expanded UPSI definitions in 2025 fill critical regulatory gaps by acknowledging market realities such as fraud, arrests, and legal disputes as material events that must be disclosed.
In essence, the 2024 amendment was about tools, while 2025 is about content.
The SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2025,
Notification Date: March 11, 2025, and
Effective Date of Amendment: June 9, 2025
The SEBI Insider Trading Amendment 2025 marks a decisive shift toward more meaningful and timely disclosures. With these changes, SEBI underscores the importance of real-time transparency in a fast-evolving market environment. Listed companies must evolve from reactive compliance to proactive governance.
As regulations get sharper, so must internal processes. From legal teams to investor relations, the ability to detect, categorize, and report UPSI swiftly will define a company’s standing in the capital markets.
