Write notes on the following: (iii) Provisions relating to insider trading in Companies Act, 2013

Provisions relating to Insider trading under Companies Act, 2013 Section 195 of the Companies Act, 2013 deals with the provisions on prohibition on insider trading of securities. Section 195 (1) provides that any person including any director or key managerial personnel shall not enter into insider trading. However, this sub section shall not apply in case where any communication required in the ordinary course of business or profession or employment or under any law. Section 195(2) provides that if any person contravenes the provisions of this section, he shall be punishable with imprisonment for a term which may extend to five years or with fine which shall not be less than five lakh rupees but which may extend to twenty-five crore rupees or three times the amount of profits made out of insider trading, whichever is higher, or with both.