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

Under the SEBI (Prohibition of Insider Trading) Regulations, 2015, which of the following best describes 'unpublished price sensitive information' (UPSI) of a listed company?

UPSI is information relating to a company or its securities that is not generally available and that, once it becomes generally available, is likely to materially affect the price of the securities. Both non-publication and price sensitivity are required, so merely private information is not UPSI.

  1. AAny information relating to the company that is not yet published and is likely to materially affect the price of its securities on becoming generally availableCorrect
  2. BAny information about the company held by its directors, whether or not it affects the price of securities
  3. CInformation that has been published in the company's annual report but not yet discussed at the AGM
  4. DInformation about a competitor that the company's promoter has obtained from a newspaper

Explanation

UPSI means information relating to a company or its securities, directly or indirectly, that is not generally available and which upon becoming generally available is likely to materially affect the price of the securities. Two tests apply: it is not generally available, and it is price sensitive. Option B drops the price-sensitivity test, so it is wrong.

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