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CS Executive · Capital Market and Securities Laws · Prohibition of Insider Trading

Section 12A(e) of the SEBI Act, 1992 prohibits dealing in securities while in possession of material or non-public information. Which statement best reflects the wording of that clause?

Section 12A(e) prohibits dealing in securities while in possession of material or non-public information, and also communicating such information to any other person, in a manner contravening the Act, rules or regulations. It is not limited to directors and was not omitted.

  1. AIt bars dealing while in possession of such information, or communicating it to any other person, in a manner contravening the Act, rules or regulationsCorrect
  2. BIt bars only dealing by directors and key managerial personnel
  3. CIt applies only to securities already traded for over one year
  4. DIt was omitted along with sections 194 and 195 of the Companies Act, 2013

Explanation

Section 12A(e) covers both dealing while in possession of material or non-public information and communicating it, in contravention of the Act, rules or regulations. It is not limited to directors. Companies Act sections 194 and 195 were omitted, but 12A of the SEBI Act remains.

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