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Front running: The law and enforcement of an ill-defined violation

Author

Listed:
  • Natasha Aggarwal

    (TrustBridge Rule of Law Foundation)

  • Amol Kulkarni

    (TrustBridge Rule of Law Foundation)

  • Bhavin Patel

    (TrustBridge Rule of Law Foundation)

Abstract

Front running remains undefined in India's codified securities law. This paper examines how the Securities and Exchange Board of India ("SEBI") enforces front running violations under the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003. We analyse the constituent legal elements of fraud, manipulation, and unfair trade practices that should inform any definition of front running, and compare these with analogous frameworks in the US and UK. Through an empirical study of 33 SEBI adjudicatory orders between 2019 and 2024, we demonstrate that SEBI's enforcement practice is disconnected from the codified law, relies on inconsistent citations, and fails to engage with key requirements such as inducement and market impact. We recommend codification of a clear definition of front running in the parent statute (and, if not in the parent statute, then in regulations issued by SEBI).

Suggested Citation

  • Natasha Aggarwal & Amol Kulkarni & Bhavin Patel, 2026. "Front running: The law and enforcement of an ill-defined violation," Working Papers 23, Trustbridge Rule of Law Foundation.
    • Handle: RePEc:bjd:wpaper:23
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    File URL: https://trustbridge.in/RePEc/papers/20260821_Aggarwaletal_frontRunning.pdf
    File Function: First version, 2026
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