1. Insider trading prohibition should be restricted to dishonest and fraudulent conduct not legitimate business. Today even investment post due diligence can be termed as insider trading.
2. For there to be insider trading, there should be an insider with access to information. The 'parity of information rule' which was never intended has been introduced. This does violence not only to the basic origins of insider trading (which arose out of the anti-fraud rule in the US), but also does violence to the statutory provision in the SEBI Act.
3. Outside information should be excluded from the prohibition. A company doing a hostile acquisition which has no access to inside information should never be charged with insider trading. Similar reasons as 2.
Note: Many people believe in the 'parity of information' rule. Here is an analogy, if you do. Imagine a Rs. 100 rupee note lying on the road and you pick it up. Now imagine another situation where a person steals another person's money by picking his pocket. The former is the parity rule, unfair but not illegal, the latter is the insider trading prohibition, both unfair and illegal.