When Electricity Policy Becomes UPSI: Inside SEBI’s IEX Case and CERC’s Parallel Probe

A 45-page interim order and a suo motu investigation reveal the growing seam between India’s capital and power markets, and why information governance now sits at the centre of market integrity.

• By Mayuri Singh and Nishant Saxena

On 15 October 2025, SEBI issued a 45-page ex-parte interim order that has since become the talk of both securities market and power market. The order treated the CERC’s 23 July 2025 market-coupling decision as unpublished price-sensitive information (UPSI), covering the period from 1–23 July 2025.

SEBI alleged that persons connected with a registered OTC platform traded in IEX shares and derivatives during this window, earning alleged ill-gotten gains of about ₹173.14 crore. The regulator recorded a −29.58% fall in IEX’s share price after the order became public, underscoring how regulatory information, not just market news, can move markets.

Barely two weeks later, the CERC stepped in.

On 28 October 2025, it launched a suo motu investigation (Petition No. 11/SM/2025) under Section 128 of the Electricity Act, 2003, citing its powers under the Power Market Regulations, 2021, including the insider-trading limb of Regulation 49(2)(b)(iii).

An Investigating Authority was appointed with a 21-day timeline, empowered to inspect records and examine parties on oath.

Together, these two actions marked the first visible cross-regulatory moment between India’s capital and electricity markets.

A Different Kind of Market Sensitivity

Market coupling, the policy at the centre of this case, is more than a technical rule. It redefines how the Day-Ahead Market (DAM) clears electricity trades across multiple exchanges. A single price, determined centrally, can shift trading volumes and revenues between platforms.

For an exchange whose valuation depends heavily on DAM turnover, coupling decisions are inherently price-sensitive.

That’s what made SEBI’s intervention inevitable once the line between “policy draft” and “price signal” blurred.

This is also a communications test: when sectoral policy and securities markets overlap, who says what, when, and to whom determines fairness.

Regulatory silence, just like premature disclosure, can both move the market.

The Law and the Pathways

Under the SEBI Act and the Prohibition of Insider Trading Regulations, interim orders are issued when the regulator finds a prima facie case of UPSI misuse. The parties get 21 days to respond and a personal hearing before SEBI decides whether to confirm or modify directions, including impounding, market bans, or disgorgement.

Under Section 128 of the Electricity Act, CERC has wide powers: inspection of records, examination on oath, and recommendations for disciplinary action. The Power Market Regulations, 2021 allow follow-on directions such as debarment, suspension of registration, or cancellation of market membership.

So while SEBI protects market integrity from a securities standpoint, CERC’s lens is market conduct within the power sector itself.

The Governance Gap

This dual episode exposes a silent vulnerability: information governance.

As India’s energy and finance systems converge, regulatory drafts, committee minutes, and consultation papers can carry market value long before they’re public.

Without strict embargo windows, access logs, or synchronized disclosures, a simple committee discussion can ripple across markets worth thousands of crores.

It’s more than a compliance issue; it’s a trust issue. Every document leak, every early whisper, chips away at the credibility of the clean energy transition itself. Building robust, transparent, and well-timed communication processes is no longer just “good optics”; it is market infrastructure.

A New Kind of Coordination

This case also raises a structural question: how should sectoral and market regulators coordinate when policy itself becomes price-sensitive?

Globally, regulators like the FCA and Ofgem (UK) or SEC and FERC (US) operate formal embargo and information-sharing protocols, ensuring drafts, consultations, and final orders move in lockstep with market disclosure.

India’s institutions now face the same test. The CERC–SEBI interface will need more than goodwill; it needs codified confidentiality protocols, shared publication calendars, and real-time surveillance handshakes between exchanges.

Beyond Compliance

Ultimately, this is much more than just about insider trading or procedural lapses.

It’s about redesigning trust between markets and institutions. Because when every line in a regulatory order can alter billions in market capitalization, how that line is drafted, shared, and communicated becomes the new form of governance.

India’s energy transition has always been powered by ambition. Now it must also be powered by discipline in words, not just in watts.

Parting Thought

Transparency doesn’t weaken institutions.

Poorly timed communication does. This episode shows why strategic communication, precise, disciplined, and proactive, is now part of India’s energy market architecture.

Also read: Putting a Price on Renewable Accountability: CERC’s Proposal on Buyout Price