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

Natasha Aggarwal (), Amol Kulkarni () and Bhavin Patel ()
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Natasha Aggarwal: TrustBridge Rule of Law Foundation
Amol Kulkarni: TrustBridge Rule of Law Foundation
Bhavin Patel: TrustBridge Rule of Law Foundation

No 23, Working Papers from 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).ls, and statutory prioritisation frameworks, to improve resource allocation while preserving access to competition law enforcement.

Pages: 58 pages
Date: 2026-08
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https://trustbridge.in/RePEc/papers/20260821_Aggarwaletal_frontRunning.pdf First version, 2026 (application/pdf)

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