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CS Executive · Capital Market and Securities Laws · Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market

Under Section 12A of the SEBI Act, 1992, which of the following is expressly prohibited for any person, directly or indirectly?

Section 12A(d) of the SEBI Act, 1992 prohibits any person, directly or indirectly, from engaging in insider trading. The other activities listed, such as holding shares long term or appointing a compliance officer, are lawful and not covered by the prohibition.

  1. AEngaging in insider tradingCorrect
  2. BSubscribing to an IPO of an unlisted company through a private placement
  3. CHolding shares of a listed company for more than one year
  4. DAppointing a compliance officer in a listed company

Explanation

Section 12A(d) states that no person shall directly or indirectly engage in insider trading. The other options are ordinary commercial or compliance activities and are not prohibited by Section 12A.

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