The Securities and Exchange Board of India (Prohibition of
Insider Trading) Regulations, 2015 (PITR), prohibits communication
of unpublished price sensitive information (UPSI) to any person
except where it is in furtherance of legitimate purposes,
performance of duties or discharge of legal obligations.
A company may provide access to UPSI if its board is of the
informed opinion that a proposed transaction is in the
company's best interest. However, if it is not an open offer
transaction, UPSI is to be made generally available at least two
trading days prior to the proposed transaction being effected.
Practical issues in this regard include determining company's
best interests and timing and content of cleansing announcements.
PITR also does not expressly legislate against "market
sounding", i.e. communication of information to gauge interest
of potential investors.
