Q. Which of the following best defines the term “Insider Trading”?
Quarterly-SFG-Jan-to-March
Red Book

[A] The legal buying or selling of a company’s stock by its board members as part of a disclosed trading plan.

[B] The practice of making investment decisions based on market rumors or analyst predictions.

[C] The illegal buying or selling of a company’s securities based on material, non-public information by individuals with access to such information.

[D] The buying or selling of stocks by brokers using public information to gain market advantage.

Answer: C
Notes:

Explanation:  Insider trading refers to the illegal use of material, non-public information (MNPI) by insiders (such as executives, employees, or associates) to gain an unfair advantage in stock trading. It is prohibited under the SEBI Act, 1992 and regulated by SEBI (Prohibition of Insider Trading) Regulations, 2015 in India.

SourceIE


Discover more from Free UPSC IAS Preparation Syllabus and Materials For Aspirants

Subscribe to get the latest posts sent to your email.

Blog
Academy
Community