Insider-trading informant tips to SEBI have increased significantly — what should boards take away?

From FY20 to FY25, SEBI received just 5 insider-trading tips from informants. In FY26 alone, it received 25, according to SEBI’s FY26 Annual Report.

That deserves the attention of every Audit Committee and Compliance Officer.

Across 28+ years of corporate and advisory experience, I have seen how insider-trading risks can arise from within an organisation — deal teams, executive assistants, and even relatives of Key Managerial Personnel.

The mechanism isn’t new. SEBI introduced its insider-trading informant framework in 2019, and rewards now go up to ₹10 crore for qualifying information, subject to the applicable conditions. What’s new is the sharp increase in its use.

Three practical questions for boards this quarter:

🔹 Is your Structured Digital Database (SDD) updated contemporaneously, with appropriate timestamps and audit trails — or reconstructed just before an inspection?

🔹 When assessing an event under Regulation 30 of SEBI LODR, do you separately assess, where relevant, whether the information constitutes UPSI, when it became UPSI, and who had access to it?

🔹 Is your internal whistleblower mechanism credible, accessible and responsive enough to encourage employees to raise concerns — and ensure those concerns are investigated and addressed appropriately?

The boardroom question is not whether someone might report a violation to SEBI. It is whether your systems can identify, address and document the underlying risk before it escalates.