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

Which provision of the SEBI Act, 1992 prohibits any person from dealing in securities while in possession of material or non-public information, or communicating such information to another, in contravention of the Act, rules or regulations?

Section 12A(e) of the SEBI Act prohibits dealing in securities while in possession of material or non-public information, and communicating such information to others, contrary to the Act, rules or regulations. Other clauses of Section 12A address fraud and acquisition of control, and Section 15G prescribes penalties.

  1. ASection 12A(e)Correct
  2. BSection 12A(f)
  3. CSection 15G(i) only
  4. DSection 12A(b)

Explanation

Section 12A(e) specifically bars dealing while in possession of material or non-public information and communicating it contrary to the Act, rules or regulations. Clause (f) deals with acquiring control or substantial securities, and clause (b) deals with schemes to defraud. Section 15G is the penalty provision, not the prohibition.

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