When asked whether media and individual journalists would also be covered under the new norms, Sinha said that any person trading on the basis of his or her access to non-public price sensitive information would come under these norms.
There have been instances -- many in Western markets and also a few in India -- where some journalists have been found guilty of insider trading practices.
"When we talk about media getting access to unpublished price sensitive information and taking a position in the market based on that, the question arises, how did they get that information. You get it from some insider in the company.
"So you (journalist) is not an insider in the company, but some insider has given you the information, so you become a 'connected person'," Sinha said.
The Sebi Chairman said that the new regulations would put in place a very clear definition for connected persons.
"The concept of connected person has been expanded (in draft norms) and even relatives have been included. This would take care of any example you may have in your mind.
"So, anybody who is in possession of any unpublished price sensitive information (UPSI), directly related persons or third party entities, they would be covered. If someone has UPSI and they are trading on the basis of that information, they will be covered," he said, while adding that the new norms would be quite comprehensive.
As per the draft norms, any person who possesses unpublished stock price sensitive information about a company would be deemed as an insider and any person who has been associated with a company in any capacity up to six months prior to trading in its stock would be termed as "connected person".
A new feature of the proposed regulations is that of treating public servants and persons holding statutory positions, which are expected to have access to UPSI, as connected persons and thereby prohibit them from trading when in possession of UPSI.
Besides, judges hearing corporate cases and outcome of which would be materially adverse or materially positive to the price of a firm's shares would be considered as a "connected person" until the order is pronounced.
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