Abstract/Introduction
Insider trading is one of the gravest offenses in the securities market, as the people who get access to the unpublished price-sensitive information (UPSI) trade the securities to gain personal interests. This is a way to sabotage market fairness, destroy investor confidence, and corrupt price discovery mechanisms, which are vital to a healthy capital market. In India, the main regulator is the Securities and Exchange Board of India, founded in the SEBI Act, 1992, charged with the responsibility of ensuring that such malpractices are avoided with its strong enforcement regulatory framework. The backbone of this regulatory regime is the SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations) which with its periodic amendments is important to note since it makes a strong imposition to listed companies, intermediaries, and insiders to comply with and follow the regulations of the reported insider trading as an essential move to enhance integrity in the market, safeguard retail investors, and maintain SEBI has simplified this with its online solutions such as SCORES (SEBI Complaints Redress System) and this is now available to even laypersons. The given article elucidates the step-by-step process of reporting insider trading to SEBI, thoroughly encased in the law and practical issues, as well as case studies and best practices. It enables investors, whistleblowers and other stakeholders to become a part of a transparent ecosystem in the market as the process has been demystified. The discourse follows a systematic format, and it encompasses definitions, frameworks, reporting structures, evidentiary standards, protection, examples, and finally lessons learned, all in a manner as simple and fresh as possible.
Main Content
Understanding Insider Trading and Its Implications
Insider trading is an unfair trading practice defined by the PIT Regulations in terms of Regulation 2(1)(g), which covers, according to the definition of insider, in relation to insider trading, all promoters, directors, employees, fiduciaries, and the person receiving the UPSI through a chain of communication. UPSI includes all information about the company or securities that is not publicly available, and when it is disclosed, it is likely to have a material impact on the price of such securities. Examples are quarterly financial outcomes, mergers and acquisitions, divestments, regulatory approvals, or litigation outcomes. Such a prohibition is supported by the concept of equality; all bidders must be operating on an equal playing field without any kind of insider trading. SEBI has increasingly tightened the belt over the years, with probes sharply increasing in FY25, but the 192 final deals alone highlight the proactive attitude of the regulator, with the assistance of the inflows of complaints.
The financial and economic consequences are devastating. Insider trading is skewed resource allocation, because the prices are not reflective of the underlying values, which can discourage all other forms of real investment and pump up volatility. To retail investors who form more than 90 million in India up to 2026, it translates to direct losses when the prices plummet due to UPSIs’ disclosure. Internationally, there are similarities with the U.S. SEC Rule 10b-5, although the regime of SEBI is specific to the growing market of India, including trading plans (Regulation 5A) and structured digital reporting requirements. Under Regulation 8, companies are required to develop a Code of Conduct (CoC), allocate compliance officers to pre-clear trades, review digital databases (SDD) of UPSI, and report violations to stock exchanges within 2 working days, in a standardized format, as introduced in the SEBI Circular dated December 2020.
Legal Framework Regulating Insider Trading and Reporting
The PIT Regulations, notified on January 15, 2015, and amended multiple times—the most recent on March 12, 2025—prohibit trading, communication, or procurement of UPSI by insiders during a ‘restricted period’ or otherwise. Regulation 3 imposes a general embargo on trading when in possession of UPSI, reversing the previous ‘connected person’ focus to a possession-based test, as clarified in the 2024 amendments. Regulation 4 requires legitimate hedging to be done through trading plans, and periodic disclosure by the promoters and directors is required under Regulation 9. Enforcing powers SEBI has investigative powers defined in accordance with the SEBI Act under Section 11, 11B, and 11C that give SEBI the authority to issue summons, search/seize, and has the power to attach assets.
SEBI has a whistleblower policy, and it is embedded in the SCORES framework. A discussion paper issued by the whistleblower mechanisms in 2019 suggested monetary rewards, up to 10% of recoveries greater than 5 Crore, with a limit of 1 Crore, to encourage tips on insider trading, front-running, and other violations. Although, until now, it does not fully serve as a reward scheme, retaliation guards are substantial, and there is protection of identities in relation to disclosure of the RTI. The violations of CoC are reported by the listed entities to BSE/NSE in Annexure I format, which serves as a feed to SEBI to monitor the situation through algorithmic surveillance of trade pattern abnormalities.
Step-by-Step Process to Report via SEBI SCORES
SEBI SCORES continues to be the gold standard of reporting, a web-based, centralized reporting system introduced in 2012 and revised to facilitate redressal of grievances. It is available at https://scores.sebi.gov.in and operates more than 90% of investor complaints online, placing insider trades and especially under market abuse or other details. Aadhaar verification or Voter ID verification can be selected by non-PAN users. On the Lodge Complaint page, after registering, click the listed company, broker, and nature: Insider Trading Violation.
The complaint form requires detailed information, including: the name of the entity about which the suspicions are raised, suspected insider(s), date/timing of trades, UPSI type (e.g., ‘unannounced merger’), summary of evidence, and price effect. Attachments should be uploaded as either PDF/JPG (up to 5MB) documents with screenshots of trades on NSE/BSE portals, emails, WhatsApp chats, and broker statements. To promote anonymity, ‘Confidential’ is ticked off, and no personal details are to be filled out; complete disclosure facilitates verification. On submission, it generates a unique ticket number where real-time tracking is possible, and there is auto-escalation in case of non-entity response within 15-30 days. Send pre-acknowledgment mail to the entity through email/Speed Post to document.
SEBI directs grievances to the organization to address within time frames: recognition (immediacy), interim response (15 days), final response (30 days). Cases that are not settled cause SEBI adjudication, which may result in an inquiry by the Investigation Department. SMS/email updates are sent to the users, and feedback loops optimize the system. In this case, the SCORES (Android/iOS) app reflects the functionality more and makes access to mobile users more convenient in Tier-2 cities such as Ghaziabad.
Alternative Channels and Evidentiary Best Practices
Although SCORES is primary, Stock exchanges can provide sideways approaches: The NSE has an online complaint form, called Complaint Online, where a case is sent to SEBI, at https://www.nseindia.com, or the BSE portal, along with arbitration via the ODR (Online Dispute Resolution) at the same address. SEBI has regional offices (e.g., Western at Mumbai), although digital primacy reigns. Evidence that can be useful: back up with publicly available data such as bulk/block dealings on exchange websites, abnormal price spikes on price charts, or trade ledgers certified by CA. Any vague claims (e.g., suspected trading) do not work; detail, Person X was buying 10,000 shares on DD/MM/YYYY before an earnings leak. Preserve the chain of custody for digital proofs via timestamps.
Whistleblowers should invoke SEBI’s Voluntary Information Disclosure Form (VIDF) for reward eligibility, detailing originality and non-public sourcing. Legal aid from investor associations like Moneylife or IEPF enhances filings. Strong evidence not only hastens probes but also mitigates dismissal risks.
Whistleblower Protections, Rewards, and Post-Reporting Dynamics
The policy protects the anonymity of the site, prevents access of the entity to the identity of the complainant and protects PIT data under the policy by RTI. The lifecycle available to stop harassment includes anti-retaliation, replacing retaliation, and the penalty violation is punishable separately (rewards). It is intended to follow the bounty mechanism of the U.S. SEC, although implementation is slow (Life-cycle). Resolution through complaint status; resolved by internet confirmation or SEBI action.
International comparisons
SEBI’s regulatory framework shows that SEBI has taken inspiration from the SEC (U.S.), FCA (UK), and ASIC (Australia). The SEC’s TCR (Tip, Complaint, Referral) portal, for example, offers bounties of between $1M and $5M and has awarded over 700 bounties since 2011, which is significantly higher than SEBI’s proposed maximum bounty. The FCA has provided 24/7 whistleblower hotline access, while SEBI’s SCORES (system for complaints-redressal) complainant can only contact during business hours.^21 ASIC cross-verifies tax records, which is something SEBI could do with the help of the CBDT (Central Board of Direct Taxes). Singapore’s Monetary Authority of Singapore (MAS) utilizes Artificial Intelligence (AI) chat for triage in real time to develop features to enhance SEBI’s existing APP (Active Promotion Program).
Overall, SEBI has done exceptionally well digitizing its regulatory approach (100% digital as opposed to SEC’s hybrid regulatory approach) and having lower costs (SEBI is free to report/earn as opposed to FCA salaries/fee-based), but it seems they have not participated as much in the bounties offered by either the SEC or FCA. Internationally harmonizing through IOSCO principles will help maintain India’s competitiveness internationally.
Technological Aids in Reporting and Detection of Insider Trading
Technology has completely changed the landscape of reporting insider trading, with SEBI implementing new cutting-edge AI-based surveillance systems like TIPS (Tick-by-tick surveillance) and ALACS (Advanced Algo for Unusual Cash Market Surveillance). These systems can check millions of trades per day and are able to detect irregularities such as unusual spikes in volume prior to the announcement of UPSI (Unpublished Price Sensitive Information), resulting in 70% of FY25 investigations being flagged automatically.
An investor can also use various apps such as NSE GoBID, Moneycontrol, or Zerodha’s Kite application to export real-time trade data. This will easily help investors compile evidence. SDDs using blockchain technology (under PIT Reg 3(5)) can provide a trail of UPSI data that cannot be tampered with, thus enabling SEBI to audit the UPSI data collection of all involved parties.
As effective tools increase for reporting and detecting, SCORES 2.0 has added chatbot functionality for efficient query resolution, as well as API integration with UPI for quick and easy verification. Future features may include using facial recognition technology to maintain anonymity while reporting and predicting potential UPSI leaks through Machine Learning and AI-based models by using data from social media sites. For example, reporter in Ghaziabad can upload reports from their mobile devices using 5G technology to complete their reporting in less than five minutes. This accessibility to these new tools has resulted in a 40% year over year increase in complaints filed.
Challenges and Solutions Faced by Reporters in Reporting
Common challenges faced by reporters in reporting include fear of retaliation, gaps in evidence, or unfamiliarity with procedures. In regard to all of these, the first can be mitigated through anonymity, even though there remains a cultural stigma; SEBI is attempting to combat this issue by creating awareness. To prove possession of UPSI, the person reporting it must collect circumstantial evidence that links them as possessing UPSI at the time of trading, such as call logs and trades; this can be proven through forensic evidence that is being developed by the NSE. Procedural errors, such as incomplete KYC, account for 15% of rejections; SEBI is addressing this issue through pre-filled templates and helplines/1800-266-7575.
During these peak reporting periods (e.g., reporting during earnings season), the reporting system becomes overloaded, creating delays in processing and receipt of responses; one solution to this is batch submissions to the reporting agency. False complaints create a substantial risk of penalties under the Information Technology Act. It is crucial for all reporters to do their due diligence prior to submitting their report. Due to the nature of the process, individuals will need some form of training, which will be provided through the SEBI’s Investor Education Charter.
Examples / Case Studies
Real-world cases illuminate reporting efficacy. In Rakesh Agrawal v. SEBI (2010), Agrawal, a senior executive, traded Reliance shares on UPSI of losses, tipping family for ₹34 lakh gains. A whistleblower complaint via NSE triggered an SEBI probe; SAT upheld ₹1 crore penalty plus disgorgement, emphasising the possession theory.
Hindustan Lever Ltd. v. SEBI (2002) involved HLL’s pre-merger buys in Brooke Bond. SEBI alleged UPSI, but SAT quashed, citing no proof of non-general availability—highlighting evidentiary thresholds.
Dilip Pendse (CMC Ltd., 2006): Pendse falsely reported the losses; the family sold. SEBI enforced 2,250,000 post-complaint disgorgement, which solidified the bans on communication.
Kishore Biyani (Future Retail, 2021): Trades during UPSI on FRL in Amazon dispute are subject to SEBI show-cause, but 67 of 287 probes to date (FY25) cover Satyam-style fraud, all 67 completed.
Other prominent ones: Reliance Petroleum (2007), where pre-IPO tips impose fines; and SEBI global lessons affected by Rajat Gupta (inspiration).
Conclusion
SCORES allows for easy, safe, and effective reporting of insider trading by investors to SEBI and strengthens India’s $5 trillion market. As such, an investor should generally focus on collecting evidence of insider trading and quickly reporting that evidence using any digital platform available to him / her. Furthermore, enforcement agencies are evolving their capabilities with the inclusion of AI technologies and by creating programs to reward whistleblowers, and therefore, all stakeholders must remain vigilant to create an environment conducive to business and, thereby, reduce the risk of fraud.
References/Bibliography/Source
- SEBI (Prohibition of Insider Trading) Regulations, 2015 [As amended 2025], https://www.sebi.gov.in.
- SCORES Platform, https://scores.sebi.gov.in.
- iPleaders, “Insider Trading under SEBI PIT”.
- NSE Reporting PDF.
- SEBI LODR & PIT.
- ICSI Guidance Note.
- NSE Complaint Portal.
- SEBI Draft Regulations.
- Bullsmart Desk.
- iPleaders Landmark Cases; TaxGuru Analysis.
- Informist FY25 Probes.
- Argus Partners Circular.
- iPleaders Whistleblower.
- Elecsonline Rewards.
- TaxGuru Filing.
- Mentorship Whistleblower.
