Insider trading: Sebi chairman calls for stricter internal controls by listed banks

The Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey on Wednesday called for greater internal controls and strict confidentiality of price sensitive information by listed banks in order to prevent insider trading.

- KHUSHBOO TIWARI

The Sebi chair was addressing managing directors and other key officials of listed banks in a session on Prohibition of Insider Trading (PIT) Regulations. Pandey added that if an employee does not require the information for legitimate purposes, they should not have access to it. Further, even informal sharing of information in casual meetings must also be treated as a serious breach.

"Weak controls are considered the prime reason for the frauds," said the Sebi chief, while emphasising the dual responsibilities on banks for information related to their own bank and those concerning other corporates.