Unpublished price sensitive information
Also written UPSI · Unpublished price sensitive information (UPSI)
Information about a company or its securities that is not generally available and that would, on becoming available, be likely to materially affect the price of the security.
In plain language
Two tests, and both must be met.
Not generally available — it has not been published in a way that puts it in the hands of the market on a non-discriminatory basis.
Price sensitive — if it were published, it would be likely to move the price materially.
Information that fails either test is not UPSI. A rumour circulating on television is generally available. A minor internal reorganisation is not price sensitive. Something that is both secret and material is UPSI, and trading on it, or passing it on, is prohibited.
How it works
The regulations list categories that ordinarily qualify: financial results, dividends, change of capital structure, mergers, demergers, acquisitions, delistings, disposals and expansion of business, and changes in key managerial personnel.
Information becomes generally available when the company discloses it to the stock exchanges — not when a journalist reports it, not when it circulates among analysts. Until that filing, everyone who holds it is an insider with respect to it.
For a research analyst the practical rule is direct: if a company official tells you something material before it is filed with the exchange, you may not publish on it and may not deal in the security. Declining to receive it is usually the safer course.
A worked example
A research analyst attends a plant visit three weeks before results are announced. Consider what the chief financial officer might say.
| What is said | UPSI? | Why |
|---|---|---|
| "Capacity utilisation is running near 95% this quarter, well ahead of the 78% we reported last quarter." | Yes | Specific, unpublished, and materially indicative of the coming result. |
| "We generally see stronger volumes in the festive quarter." | No | Generally available; an industry pattern, not a fact about this quarter. |
| "The board meets on the 14th to consider a bonus issue." | Yes | Unpublished and plainly price sensitive. |
| "Our new plant was commissioned last month" — already filed with the exchange | No | Generally available from the filing. |
On receiving either of the two UPSI items, the analyst must not publish a note based on it and must not deal in the security until the company has disclosed it to the exchange. Passing it to a colleague or a client would itself be a breach.
Why NISM asks about it
Chapter 14 covers the SEBI (Prohibition of Insider Trading) Regulations, 2015 and the research analyst's duties under them. Questions typically present a piece of information and ask whether it is UPSI, or describe an analyst's conduct and ask whether it breached the regulations.
Common exam traps
- Both limbs must be satisfied. Unpublished but immaterial is not UPSI; material but already public is not UPSI.
- Generally available means published to the market at large, not "known to several people". Circulation among a group of analysts does not make it public.
- The offence covers communicating UPSI as well as trading on it — and is committed even if no trade follows.
- It is not confined to company employees. Anyone in possession of UPSI, including an analyst or a journalist, is caught.
- Trading is prohibited even where the trade was already planned, unless the specific defences in the regulations apply.
Where this is taught
- Series IX · Chapter 2: Introduction to the Merchant Bankingintroduced here
- Series III-C · Chapter 7: SEBI (Prohibition of Insider Trading) Regulations, 2019introduced here
- Series XIX-B · Chapter 5: Regulatory Frameworkintroduced here
- Series XV · Chapter 14: Legal and Regulatory Environmentintroduced here
- Series VII · Chapter 2: Market Participants in the Securities Marketintroduced here
- Series II-A · Chapter 6: SEBI- Role and Regulationsintroduced here
- Series II-B · Chapter 5: SEBI- Role and Regulationsintroduced here
- Series III-A · Chapter 7: SEBI (Prohibition of Insider Trading) Regulations, 2015introduced here
Related terms
- Chinese WallAn enforced separation inside a firm between departments holding confidential price-sensitive information and those dealing with clients, sales or public research.
- Conflict of interestAny interest of the analyst's own — a shareholding, a fee, a relationship — that could bias the research, and which the regulations require to be disclosed rather than merely avoided.
- InsiderAnyone who is a connected person, or who simply possesses or has access to unpublished price sensitive information — possession alone is enough, with no relationship to the company required.
- Insider informationMaterial non-public information which, when published, would immediately affect an investor's decision to buy or sell the security.
- Structured digital databaseThe tamper-evident internal register every handler of unpublished price sensitive information must maintain, recording the nature of the information and the PAN of everyone who shared it and received it.
- Deemed connected personsCategories of people the insider trading rules treat as connected automatically — relatives, group companies, trustees, bankers, auditors — unless the person proves the contrary.
- Generally available informationInformation accessible to the public on a non-discriminatory basis — the opposite pole of unpublished price sensitive information, and expressly not including unverified media reports.
- Immediate relativeA spouse, plus any parent, sibling or child of the person or of the spouse who is either financially dependent on them or consults them on securities trading decisions.
- Trading plans — regulation 5A pre-announced, irrevocable schedule of trades an insider files with the compliance officer, which may not begin for 120 calendar days and then executes without pre-clearance or trading window limits.
- InformantAn individual who voluntarily files a Voluntary Information Disclosure Form with SEBI about an alleged insider trading violation — protected from retaliation, and an informant whether or not any reward follows.
- Connected personA person whose association with a company in the six months before the act put them, or could reasonably be expected to put them, in a position to access unpublished price sensitive information.
- Trading windowA notional window used to monitor trading by designated persons — closed by the compliance officer whenever they can reasonably be expected to possess unpublished price sensitive information.
- Restricted listThe confidential list of securities an intermediary's compliance officer maintains, used as the basis for approving or rejecting applications for pre-clearance of trades by designated persons.