Prohibition of Insider Trading, CS Executive CMSL Dec 25 / June 26

Prohibition of Insider Trading CS Executive: The Prohibition of Insider Trading is an important topic in the CS Executive Corporate and Management Accounting (CMSL) paper. It is related to teaching fair trading practices in the stock market.

Insider trading refers to buying or selling company shares using secret information that is not available to the public. This act is considered unfair and illegal because it gives some people an advantage over others. The Securities and Exchange Board of India (SEBI) strictly prohibits insider trading under the SEBI (Prohibition of Insider Trading) Regulations, 2015. 

Prohibition of Insider Trading CS Executive Overview

Insider trading affects the fairness and integrity of the financial market. It creates inequality among investors and can harm the reputation of companies and the confidence of shareholders. An insider is a person who has access to price-sensitive information about a company. Such people may include:

• Company directors

• Employees

• Promoters

• Auditors

• Legal advisors

• Family members of insiders

Insider Trading is prohibited because:

• To protect small investors.

• To maintain market transparency.

• To build public trust in the securities market.

• To ensure fair treatment for all investors.

CS Executive CMSL December 2025 Syllabus Insider Trading

The Prohibition of Insider Trading CS Executive December 2025 CMSL syllabus includes insider trading as part of the Securities Laws and Capital Markets section. Students must understand both theory and application-based concepts. The details related to the CS Executive CMSL December 2025 Syllabus are provided below:

Key Topics Covered

1. Definition and meaning of insider trading

2. SEBI (Prohibition of Insider Trading) Regulations, 2015

3. Unpublished price-sensitive information (UPSI)

4. Roles and responsibilities of compliance officers

5. Penalties and punishment for insider trading

6. Case studies related to insider trading in India

Learning Objectives

• Understand the legal meaning of insider trading.

• Learn how SEBI controls such practices.

• Know the duties of directors and employees.

• Recognise how laws promote fair market practices.

CS Executive June 2026 CMSL Topics Insider Trading

The June 2026 Prohibition of Insider Trading CS Executive CMSL syllabus continues to include insider trading under the Capital Market and Securities Laws. It ensures students stay updated with the latest SEBI rules. Some of the major CS Executive CMSL important topics are as follows:

• Concept of Insider and Connected Person

• Code of Conduct for Prevention of Insider Trading

• Trading Window and Pre-Clearance of Trades

• Disclosure of Trading by Insiders

• Role of Compliance Officer

• Penalties under SEBI Act, 1992

• Recent Amendments to SEBI Regulations

CS Executive Past Questions Insider Trading

Practising sample questions related to the Prohibition of Insider Trading CS Executive tests both conceptual clarity and legal understanding. Some past questions that have appeared in the CS Executive CMSL exam on the topic of insider trading are as follows:

Objective Questions

1. What is the meaning of UPSI in insider trading?
   a) Unpublished Price Sensitive Information
   b) Unused Public Source Information
   c) Unavailable Price Stock Information
   d) None of the above

2. Under which regulation is insider trading prohibited in India?
   a) SEBI (Prohibition of Insider Trading) Regulations, 2015
   b) Companies Act, 2013
   c) SEBI Act, 1992
   d) Income Tax Act, 1961

3. Who among the following is considered an insider?
   a) Company employee
   b) Promoter
   c) Auditor
   d) All of the above

Descriptive Questions

1. Define insider trading and explain why it is prohibited.

2. Discuss the role of SEBI in preventing insider trading.

3. Explain the term Unpublished Price Sensitive Information with examples.

4. Describe penalties for insider trading under SEBI laws.

CS Executive Corporate and Allied Laws Exam

In the Corporate and Allied Laws paper, the Prohibition of Insider Trading CS Executive is linked to corporate governance and ethical business practices. A company secretary must ensure that all trading activities follow the rules and regulations set by SEBI. 

Section 195 of the Companies Act, 2013 initially dealt with insider trading but was later omitted, giving SEBI full power. Currently, the SEBI (Prohibition of Insider Trading) Regulations, 2015, handle all related cases.

The relevance of Insider Trading in Corporate Laws is as follow

• Ensures fairness in company management.

• Prevents misuse of confidential information.

• Protects shareholder interest and promotes transparency.

• Promotes ethical conduct in business operations.

CS Executive Exam Preparation CMSL

Preparing for the Prohibition of Insider Trading CS Executive CMSL exam requires a clear understanding of insider trading laws and their applications. Students should follow a planned and smart study approach. Some of the tips for the CS Executive Exam Preparation for CMSL are as follows:

• Read SEBI regulations carefully: Go through the 2015 SEBI (Prohibition of Insider Trading) regulations. Highlight key definitions and rules.

• Create short notes: Make summary notes on important terms like insider, UPSI, and trading window.

• Understand through examples: Learn real-life cases of insider trading to understand how SEBI takes action.

• Revise regularly: Set aside weekly time for revision and practice questions from past papers.

• Focus on MCQs and case studies: The exam includes multiple-choice questions related to the Prohibition of Insider Trading CS Executive, so practice them to increase speed and accuracy.

• Stay updated: Follow SEBI’s official website or CS Institute updates to learn about new circulars and changes in regulations.