DEMAT ACCOUNT AS A TOOL FOR PREVENTING INSIDER TRADING: A LEGAL ASSESSMENT

Author – KAMANDLA ABHIRAM, Student at Bennett University

Best Citation – KAMANDLA ABHIRAM, DEMAT ACCOUNT AS A TOOL FOR PREVENTING INSIDER TRADING: A LEGAL ASSESSMENT, Indian Journal of Legal Review (IJLR), 3 (2) of 2023, Pg. 44-52, APIS – 3920 – 0001 & ISSN – 2583-2344.

Abstract

Insider trading is a major concern for investors, regulators, and the general public. It undermines the integrity of the securities market and erodes public trust in the fairness of the market. In recent years, there has been a growing recognition of the role that Demat Accounts can play in preventing insider trading. This research paper aims to assess the legal framework surrounding the use of Demat Accounts as a tool for preventing insider trading in India.

The paper begins by providing a background on the concept of Demat Accounts and insider trading, and the legal framework governing them. It then examines the effectiveness of Demat Accounts in preventing and detecting insider trading, using case studies from India and other jurisdictions. The paper also analyses the legal implications of using Demat Accounts to prevent insider trading, including the regulatory framework and the rights of investors.Based on the analysis, the paper provides recommendations for strengthening the legal framework governing Demat Accounts to prevent insider trading. These recommendations include measures to enhance transparency, increase penalties for violators, and improve investor education. The paper concludes that Demat Accounts can be a powerful tool for preventing insider trading, but their effectiveness depends on the strength of the legal framework and the vigilance of regulators.