[By Raghav Sharma]
The author is a student of Indian Institute of Management Rohtak.
Introduction
The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) establish a comprehensive framework to prevent insider trading while maintaining market efficiency. Central to this framework is the concept of Unpublished Price Sensitive Information (UPSI), which governs both corporate disclosure obligations and restrictions on individual trading. Central to this framework is the concept of Unpublished Price Sensitive Information (UPSI), which governs both corporate disclosure obligations and restrictions on individual trading.
Recent decisions by the Securities Appellate Tribunal and the Supreme Court in Reliance Industries Limited (May 2025, upheld December 2025), alongside SEBI’s Quasi-Judicial Authority order in Adani Green Energy Limited (December 2025), have prompted discussions about regulatory consistency. This article examines these decisions not as conflicting precedents, but as complementary components of a dual-track regulatory framework addressing distinct obligations under separate provisions of securities law.
The Conceptual Foundation: What Constitutes UPSI?
Regulation 2(1)(n) of the PIT Regulations defines UPSI as information relating to a company or its securities that is not generally available and, upon becoming generally available, is likely to materially affect the price of securities. The definition hinges on two critical concepts, materiality and general availability.
Regulation 2(1)(e) defines “generally available information” as information accessible to the public on a non-discriminatory basis. Beyond this statutory guidance, the N.K. Sodhi Committee Report (2013), which forms the legislative foundation of the 2015 PIT Regulations, deliberately refrained from exhaustively defining “non-discriminatory access”, observing that this would be “a question of fact, to be answered by adopting the standard of a reasonable man”. The Committee clarified that paywalled access does not render information discriminatory, since it remains accessible to any person willing to pay. Through subsequent adjudicatory practice, notably in 63 Moons Technologies Ltd. (2018) and Bharti Airtel Ltd. (2020), SEBI applied contextual factors including source credibility and reach, specificity of reported facts, and corroboration across multiple outlets. The Note appended to Regulation 2(1)(n) clarifies that information published on a stock exchange website would ordinarily be considered generally available. However, the precise interaction between media reports, corporate authentication, and formal disclosure has evolved through legislative amendments and judicial interpretation.
The 1992 PIT Regulations used the phrase “not generally known or published by the company,” suggesting information could become known through means other than company publication. The landmark decision in Hindustan Lever Ltd v. SEBI (1998) recognized that market expectations reported in media could constitute generally known information. However, a 2002 amendment narrowed this definition, requiring information to be “published by the company or its agents” to cease being unpublished.
The 2015 Regulations adopted a broader approach, providing that information would be generally available if accessible to the public on a non-discriminatory basis, regardless of source. This expansive interpretation received judicial support in several decisions, most notably the Securities Appellate Tribunal’s decision in Future Corporate Resources Pvt. Ltd. v. SEBI (December 2023), which explicitly rejected a restrictive view that only stock exchange disclosures constitute generally available information.
The May 2024 Amendment: Adding Nuance
The May 2024 amendment to Regulation 2(1)(e) excluded “unverified event or information reported in print or electronic media” from the definition of generally available information. This amendment introduces an important qualification that not all media reports render information generally available. The distinction between verified reporting containing specific facts from credible sources and unverified speculation or rumours becomes legally significant.
This amendment does not represent a reversion to the restrictive 2002 approach. Rather, it recognizes that the quality and reliability of media reporting vary substantially, and regulatory frameworks must distinguish between substantiated journalism and mere speculation.
To illustrate this distinction, consider a scenario where Reuters reports that “Company X is in advanced merger talks with Company Y, according to three sources familiar with the matter, with a deal expected within two weeks.” This would likely constitute verified information under the May 2024 framework due to multiple attributed sources, specific factual details, and a credible news outlet. Conversely, a social media post stating “hearing rumors that Company X may be exploring partnerships” would constitute unverified information lacking substantiation. The amendment thus creates a qualitative threshold, permitting trading based on substantiated journalism while preserving the UPSI character of mere speculation.
While the May 2024 amendment post-dates both the Reliance and Adani Green decisions, it crystallises a distinction that was already implicit in the regulatory architecture these cases navigate. The amendment’s exclusion of “unverified” media reports from generally available information does not, in either case, retrospectively alter the legal principles applied—both involved substantiated reporting from credible sources containing specific, verifiable facts. Rather, the amendment provides an interpretive lens that sharpens the inquiry: the relevant question is not merely whether information appeared in media, but what quality of information was disseminated and to whom the corresponding regulatory obligation attaches. The cases examined below illustrate this differentiation precisely, Reliance addressing corporate disclosure duties triggered by media leakage, and Adani Green addressing individual trading restrictions where verified media reports rendered information generally available. Together, they demonstrate the complementary operation of India’s dual-track framework, a coherence the 2024 amendment now makes explicit.
The Reliance Framework: Corporate Disclosure Obligations
The Reliance case involved negotiations between Facebook and Reliance Industries for an investment in Jio Platforms Limited. On March 24, 2020, major publications such as the Financial Times, Reuters, and The Economic Times reported on an impending deal. Following these reports, the stock price rose by approximately 15 percent. The formal announcement came nearly a month later on April 22, 2020, resulting in an additional 10 percent price increase.
SEBI alleged violations of Section 30(10) and 30(11) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Principles 1 and 4 of Schedule A to the PIT Regulations. Critically, the allegations did not concern Regulation 4, which prohibits trading while in possession of UPSI, but rather the Code of Fair Disclosure provisions.
Principle 1 requires prompt public disclosure of unpublished price sensitive information that would impact price discovery. Principle 4 requires prompt dissemination of unpublished price-sensitive information that gets disclosed selectively, inadvertently, or otherwise to make such information generally available.
The Securities Appellate Tribunal held that selective leakage of information, regardless of accuracy or completeness, does not discharge a company’s responsibility to make prompt disclosure. The Tribunal emphasized that information assumes the characteristics of generally available information only when the company authenticates it.
The Supreme Court upheld this reasoning, noting significantly that the 15 percent price increase following media reports on March 24-25, 2020 exceeded the 10 percent increase following the formal corporate announcement on April 22, 2020. This finding evidenced that leaked information was materially impacting price discovery, triggering the company’s disclosure obligations under Principle 4.
The Adani Green Framework: Individual Trading Restrictions
In May 2021, multiple reputable publications, including Mint, Bloomberg, Economic Times, Business Standard, and Hindustan Times published detailed reports about Adani Green Energy Limited’s proposed acquisition of SB Energy Holdings Limited. These reports, appearing on May 16-17, 2021, contained specific information including valuation details exceeding $650 million, due diligence processes, and strategic rationale. The formal announcement followed on May 19, 2021.
SEBI alleged that individuals traded on May 14, 2021 while in possession of UPSI and that insider communication of UPSI occurred. The Quasi-Judicial Authority conducted a detailed examination of when the alleged UPSI came into existence and when it ceased to constitute UPSI.
The authority found that even accepting SEBI’s theory, the UPSI could not have come into existence before May 13, 2021, when the non-disclosure agreement was signed, and due diligence commenced. More significantly, the authority held that the alleged UPSI ceased to be UPSI on May 16, 2021, when it became available on a non-discriminatory basis through publication of news reports.
The authority extensively relied on the Future Corporate Resources precedent, which held that media reports available to the public on non-discriminatory basis constitute generally available information. Consequently, trading on May 14, 2021 predated the emergence of UPSI, and even if UPSI had existed, it would have ceased to constitute UPSI by May 16, 2021. The proceedings were dismissed.
Understanding the Dual-Track Framework
These decisions address different actors, obligations, and legal provisions within India’s securities regulatory framework. Understanding their complementary nature requires recognizing two parallel tracks:
Track 1: Corporate Disclosure Obligations (Reliance Framework) This track, governed by Schedule A to the PIT Regulations and SEBI (LODR) Regulations, applies to listed companies. It addresses whether companies must make formal disclosure after information leaks to media. The answer is that leaks trigger the disclosure duty under Principle 4, which explicitly contemplates information disclosed “inadvertently or otherwise.” The purpose is ensuring authenticated, universally accessible information through official channels to maintain orderly markets and enable regulatory oversight.
Track 2: Individual Trading Restrictions (Adani Green Framework) This track, governed by Regulation 4 (trading prohibition) and the UPSI definition in Regulation 2(1)(n), applies to insiders and connected persons. It addresses whether individuals can trade after media reports make information public. The answer, consistent with Future Corporate Resources, is affirmative when information is genuinely available on a non-discriminatory basis. The purpose is preventing unfair advantage while allowing legitimate trading on public information.
The Complementary Logic
These tracks operate simultaneously without contradiction. Consider the Reliance timeline when on March 24, 2020, media reports appeared, for individuals subject to Regulation 4 (Track 2), information became generally available, permitting trading. For Reliance Industries (Track 1), the disclosure duty was triggered, requiring prompt authentication.
During the period March 25 to April 21, 2020, while Reliance remained silent, individuals could continue trading on publicly available information, but Reliance was violating its duty to promptly disseminate information under Principle 4. When Reliance finally made its formal announcement on April 22, 2020, it discharged its disclosure duty, though belatedly. For individuals, nothing changed regarding the availability of information, which had been public since March 24.
This framework creates accountability without over-criminalizing market behaviour. Media publication makes information generally available for trading purposes because information is accessible to all investors on a non-discriminatory basis, protecting individuals from insider trading liability for acting on public information. However, media publication does not discharge corporate disclosure duty because companies have affirmative obligations to authenticate information, Principle 4 explicitly contemplates leaks, and investors need official confirmation from authoritative sources.
Critical Analysis: Interpretive Clarity and Regulatory Consistency
The Securities Appellate Tribunal’s statement in Reliance that information becomes generally available “only when the company authenticates it” requires contextual interpretation. Read in the context of addressing corporate obligations under Principle 4, this language concerns whether media reports satisfy a company’s duty to make information generally available through official channels. It does not address whether information is generally available for purposes of determining individual trading liability under Regulation 4.
The distinction between information being “selectively available to subscribers/readers” versus “generally available to the entire universe of investors” is meaningful in the disclosure context. A company cannot claim media reports satisfy its duty to disseminate information through authenticated official channels. However, this does not mean information reported in widely circulated publications is not generally available for trading purposes.
The May 2024 amendment excluding “unverified event or information” reinforces this framework by distinguishing speculation from verified reporting. Unverified reports do not render information generally available for trading purposes, but material leaked information still triggers corporate disclosure duties. Verified reports with specific details from credible sources become generally available for trading while simultaneously triggering authentication duties.
Addressing Regulatory Concerns
Several concerns merit consideration. First, the framework’s effectiveness depends on distinguishing verified from unverified media reports. This distinction requires case-by-case assessment considering factors including source credibility, specificity of information, corroboration across multiple outlets, and attribution to identifiable sources. Regulatory guidance articulating these factors would enhance predictability.
Second, the timing of corporate disclosure obligations requires clearer standards. What constitutes “prompt” dissemination under Principle 4? The Reliance case involved a month-long delay, which was clearly excessive given the 15 percent price impact. However, companies need reasonable time to assess leaked information, consult legal counsel, and prepare appropriate disclosures. Regulatory guidance establishing presumptive timeframes (perhaps measured in hours or days rather than weeks) would provide clearer expectations.
Third, the interaction between ongoing negotiations and disclosure duties remains complex. Companies legitimately maintain confidentiality during preliminary discussions. However, once substantive details leak to media with material price impact, the balance shifts toward disclosure. The framework could benefit from clearer articulation of when negotiations mature sufficiently that leaks trigger immediate disclosure obligations.
Fourth, enforcement consistency requires attention. Regulators must apply the dual-track framework uniformly, distinguishing corporate disclosure cases from individual trading cases and applying appropriate legal standards to each. Adjudication orders should explicitly identify which track applies and which provisions govern the alleged violations.
Conclusion
The Reliance and Adani Green decisions are not conflicting precedents but rather coherent applications of a dual-track regulatory framework that addresses distinct legal regimes. For listed companies, this framework creates an affirmative duty to promptly authenticate material information once it leaks to the media, regardless of whether the reporting is verified or unverified. Companies cannot remain silent while their stock price reacts to leaked information, even if individual traders may legitimately act on verified media reports. For insiders and connected persons, verified media reports from credible sources containing specific factual details render the information generally available, permitting trading without liability for insider trading. However, trading based on privileged access to information not yet verified in the media, or on unverified speculation, remains prohibited.
Greater regulatory clarity is nevertheless required. SEBI should issue focused guidance delineating corporate disclosure duties from individual trading prohibitions, specify criteria for distinguishing verified from unverified media reports, and prescribe indicative timelines for corporate disclosure following material leaks. Adjudicatory bodies should explicitly identify which legal track applies in each case rather than treating all UPSI disputes interchangeably.
The dual-track framework reflects sound regulatory design. The challenge lies not in conceptual coherence but in consistent application and clearer guidance. With refinement, this approach offers a principled mechanism for balancing corporate transparency obligations against individual trading rights in India’s capital markets.