In today’s fast-paced and information-driven capital markets, the difference between what’s public and what’s private can mean everything. That’s why Unpublished Price Sensitive Information (UPSI) lies at the heart of India’s insider trading regulations, governed by the SEBI (Prohibition of Insider Trading) Regulations, 2015.
With the latest SEBI amendment on March 11, 2025, effective from June 10, 2025, the framework around UPSI has become more robust, ensuring greater transparency, accountability, and market integrity.
In this blog, we’ll explore:
- What UPSI means under SEBI regulations
- The impact of the 2025 amendments
- How companies should handle and disclose UPSI
- A practical compliance checklist
- Do’s and don’ts
- FAQs for insiders and compliance teams
What is UPSI?
UPSI stands for Unpublished Price Sensitive Information — any information that:
- Is not publicly available, and
- Materially affects the price of a company’s securities when made public.
UPSI ensures a level playing field for all investors. If someone trades based on such information while others don’t have access to it, that’s insider trading — illegal and punishable under law.
Legal Definition of UPSI
As per Regulation 2(1)(n) of the SEBI (PIT) Regulations, UPSI includes (but is not limited to):
- Financial results
- Dividends
- Change in capital structure
- Mergers, demerger, acquisitions, delistings, disposals and expansion of business
- Changes in Key Managerial Personnel (KMP)
New Additions as per March 11, 2025 Amendment (effective from June 10, 2025):
SEBI expanded the definition of UPSI to include:
- Award or termination of significant contracts (not in normal course of business)
- Changes in KMP is not covered in UPSI if it is due to superannuation or completion of tenure
- Resignation of a Statutory Auditor or Secretarial Auditor
- Fundraising activities (e.g., via QIPs, debt issuance)
- Changes in credit ratings (excluding ESG)
- Agreements affecting management/control
- Fraud or defaults by the company, its promoter, director, KMP, or subsidiary or action(s) initiated or orders passed by any authority against them or arrest of KMP, promoter or director of the company, whether occurred within India or abroad
- Resolution plan/restructuring or one-time settlement in relation to loans/borrowings from banks/financial institutions;
- Initiation of forensic audits
- Admission of winding-up proceedings or initiation of CIRP, approval of Resolution Plan or rejection thereof
- Outcome of litigations or disputes which may have impact on the Company
- Giving of Guarantees, indemnity or becoming surety, outside ordinary course of business
- Change in key licenses or approvals
For identification of event as UPSI, the guidelines of materiality referred at Schedule III, shall apply
These changes ensure broader coverage of market-sensitive events and align UPSI with disclosure norms under LODR.
Who is an Insider?
An insider means:
- Connected Person
- Any person who has access to UPSI, whether directly or indirectly
The December 6, 2024 amendment also expanded the scope of connected persons, including their relatives, partners of firms, household members, and financially linked individuals.
Handling and Sharing of UPSI
Disclosure of UPSI
Companies must follow a fair disclosure policy. According to Schedule A of the PIT Regulations, listed entities should:
- Make prompt public disclosure of UPSI
- Ensure uniform and universal dissemination
- Designate a Chief Investor Relations Officer
- Handle all UPSI on a need-to-know basis
- Have appropriate internal controls and policies
Permissible Sharing (Only if):
- On a need-to-know basis
- For legitimate purposes
- With confidentiality safeguards (NDAs, audit trails)
- Logged in the Structured Digital Database (SDD)
Entry of information, not emanating from within the organisation, may be done not later than 2 calendar days.
Prohibited Actions:
- Selective disclosure to analysts or media
- Informal discussions or leaks
- Trading based on UPSI possession, even if not “used”
Closure of Trading Window:
- Trading Window shall be closed whenever a DP or class of DP are or can be expected to be in possession of UPSI
- For UPSI not emanating from within the Listed Company, trading window may not be closed.
Example:
In case Company Secretary of the Company resigns, the related information becomes UPSI, necessitating the closure of the trading window. Pursuant to Regulation 30 of LODR Regulations, the same is required to be intimated to the stock exchange within 24 hours, thus removing the UPSI status. Therefore, the trading window should remain closed from the resignation until the intimation is filed with the stock exchange(s). It is advisable to promptly inform the stock exchange upon receipt to prevent the information from being considered UPSI.
Do’s and Don’ts for UPSI Compliance
Do’s
- Identify UPSI early — use internal materiality thresholds
- Disclose UPSI promptly and fairly via stock exchanges
- Log every UPSI communication in the SDD
- Implement trading window closure during sensitive periods
- Train employees and insiders regularly
- Review and update insider trading policies often
Don’ts
- Don’t trade while possessing UPSI — intent is irrelevant
- Don’t share UPSI informally (e.g., chats, calls, cafes)
- Don’t delay or selectively disclose material info
- Don’t skip logging UPSI received from external sources
- Don’t assume that third parties aren’t “insiders”
Compliance Checklist for Compliance Officers (in relation to UPSI)
| Area | Task | Status |
|---|---|---|
| Policy Review | Update Code of Conduct & Fair Disclosure Policy | ⬜ |
| Formulation of Policy | Formulation of Policy for inquiry in case of leak of UPSI | ⬜ |
| Training | Conduct UPSI/insider trading training (at least bi-annually) | ⬜ |
| SDD Maintenance | Record all UPSI sharing (internal/external) within 2 days | ⬜ |
| Event Monitoring | Track events for UPSI triggers — include external sources | ⬜ |
| Whistleblower Channel | Ensure anonymous reporting options | ⬜ |
| Trading Window | Monitor and enforce closure based on sensitive periods | ⬜ |
| Audit Trail | Retain SDD logs for a minimum of 8 years | ⬜ |
| Board Oversight | Report breaches to Board/Audit Committee promptly | ⬜ |
| 3rd Party Safeguards | Use NDAs/confidentiality clauses with vendors, consultants | ⬜ |
FAQs on UPSI
1. What is UPSI in simple terms?
Non-public info that can move stock prices when disclosed.
2. Can UPSI come from outside the company?
Yes — e.g., legal notices, regulator actions, credit rating changes.
3. Can you trade if you didn’t use UPSI, but had access?
No. Trading while in possession of UPSI is a violation, regardless of intent.
4. Is training mandatory for compliance?
Yes. SEBI expects regular sensitization for all insiders.
5. What is the SDD?
Structured Digital Database — a non-tamperable log of all UPSI sharing (who, with whom, when, why).
6. How long should UPSI records be kept?
At least 8 years, or until completion of investigation (whichever is later).
7. How is UPSI handled in group companies or joint ventures?
Each company must treat its own UPSI independently. However, if UPSI of a listed entity is accessible to a person through a group company or JV, it still triggers SEBI obligations. Compliance teams across group entities should coordinate and share insider lists. Further, the Company should have appropriate Chinese wall mechanism.
8. Can a relative of an insider be prosecuted even if the insider didn’t directly share the UPSI?
Yes, if a relative trades based on information reasonably suspected to have been sourced from an insider, both parties may be investigated. Courts often look at pattern, timing, and access proximity to assess violations.
9. Can SEBI prosecute someone for insider trading without proving financial benefit?
Yes. SEBI doesn’t need to prove profit motive or gain. Merely trading while in possession of UPSI is a strict liability offense. The absence of a gain might reduce penalties, but it won’t absolve the violation.
10. What happens if a company violates UPSI rules?
Penalties include fines up to ₹25 crore or 3 times of the profit made (whichever is higher), disgorgement, market bans, or even jail time.
Summary
The SEBI Insider Trading Regulations, especially post-2025 amendments, emphasize a zero-tolerance approach toward misuse of UPSI. For companies, this means:
- Proactive identification of UPSI
- Rigorous documentation via SDD
- Transparent disclosure
- Robust internal controls and training
With a combination of good governance, technology, and compliance discipline, organizations can protect themselves and the capital markets from the risks of insider trading.
Let us know your needs — we’re here to help ensure your PIT framework is audit-ready and airtight.
For more updates on insider trading and compliance, follow our blog at Stox N Tax.
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