Expanding the Frontiers of UPSI and Market Surveillance
Author: Atul Agarwal*
This note offers a regulatory perspective on SEBI’s interim order dated October 15, 2025, in the IEX insider trading matter. It focuses on how the case illustrates misuse of unpublished price-sensitive information (UPSI), the widening contours of insider trading liability, and SEBI’s evolving approach to preserving market integrity through surveillance and enforcement.
SEBI’s October 15, 2025, interim order against eight individuals in the IEX insider trading case is a significant development in market regulation, highlighting the use of unpublished price-sensitive information (UPSI) and expanding the scope of insider trading liability.
The case involves individuals allegedly making over ₹173 crore by using inside information from the Central Electricity Regulatory Commission (CERC) about market coupling, which was expected to negatively impact IEX shares.
Editorials discuss the order’s implications for market integrity, the potential for both intentional and accidental insider trading, and SEBI’s increasingly aggressive enforcement, notes Business Standard.
Key Aspects of the SEBI Order and Editorials
Modus Operandi: The eight individuals allegedly placed bearish bets (put options) on IEX shares just before the CERC announced its market coupling order, which caused IEX shares to drop by nearly 30%.
Illicit Profits: The trades resulted in illegal gains of over ₹173 crore, which SEBI has ordered to be impounded.
Source of Information: The inside information reportedly came from two CERC employees who allegedly shared confidential documents and meeting minutes with individuals who then traded on them, say The Indian Express and The Hindu.
SEBI’s Action
SEBI barred eight individuals from the securities market until further notice. Ordered the impounding of over ₹173 crore in illicit gains and barred them from trading until the amount is secured.
The entity has seized confidential documents and communications from the individuals’ devices during a search and seizure operation.
Wider Implications For Insider Trading
The order has expanded the potential scope of insider trading liability by covering individuals who may have both intentional and unintentional involvement, such as those sharing a household with an insider, according to LegalBrief.
It signals SEBI’s intensified enforcement in the derivatives market and its focus on using information from one regulator to prosecute trading in another, notes Business Standard.
Summing Up
This matter stands out as one of SEBI’s largest and most significant crackdowns against insiders and is likely to serve as a benchmark for future actions on the misuse of UPSI and derivative market abuse.
*The Author is Atul Agarwal, General Manager, Integrated Surveillance Department, SEBI Mumbai.
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