SEBI amends norms! Buying, selling of mutual funds now comes under insider trading rules
PTI, Nov 25, 2022, 2:38 PM IST
Capital markets regulator SEBI has amended norms to bring buying and selling of mutual fund units under the ambit of insider trading rules.
At present, insider trading rules are applicable to dealing in securities of listed companies or those proposed to be listed, when in possession of Unpublished Price Sensitive Information (UPSI). The units of mutual funds are specifically excluded from the definition of securities under the rules.
SEBI’s latest decision follows the Franklin Templeton episode, in which the fund house’s few executives were accused of redeeming their holdings in the schemes ahead of the six debt schemes shutting for redemption.
”No insider shall trade in the units of a scheme of a mutual fund, when in possession of unpublished price sensitive information, which may have a material impact on the net asset value of a scheme or may have a material impact on the interest of the unit holders of the scheme,” SEBI said in a notification issued on Thursday.
Under the new rules, asset management companies (AMCs) will have to disclose the details of holdings in the units of its mutual fund schemes, on an aggregated basis, held by the AMC, trustees and their immediate relatives on the platform of stock exchanges ”Details of all the transactions in the units of its own mutual funds… executed by the designated persons of asset management company, trustees and their immediate relatives shall be reported by the concerned person to the compliance officer of asset management company within two business days from the date of transaction,” the regulator said.
Also, the Securities and Exchange Board of India (SEBI) has prescribed a minimum standard of code of conduct for designated persons in line with provisions of existing insider trading rules.
Further, the compliance officer of the AMC would determine the closure period during which a designated person cannot transact in units of the mutual fund.
Specifying institutional mechanism for prevention of insider trading, SEBI said, ” Chief Executive Officer or Managing Director of an asset management company with the approval of the trustee or such other analogous person of an intermediary or fiduciary, shall put in place adequate and effective system of internal controls to ensure compliance with the requirements given in these regulations to prevent insider trading.”
These internal controls to prevent insider trading include all employees who have access to UPSI are identified as designated persons and all the UPSI needs to be identified and its confidentiality be maintained.
To give this effect, SEBI amended insider trading norms that became effective from November 24.
Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.
Top News
Related Articles More
Sensex, Nifty fall for 2nd day on FII selling; RIL, ICICI Bank major drag
Sensex, Nifty fall over 1 pc, snap two-day rally ahead of US Fed interest rate decision
SC orders liquidation of grounded air carrier Jet Airways’ assets
Home-cooked meals become dearer in October on costlier vegetables
Sensex, Nifty surge over 1 pc on heavy buying in IT stocks as Trump set to win US polls
MUST WATCH
Latest Additions
No greater feeling than serving those in need: Outgoing CJI D Y Chandrachud
Baikampady: Here, even elederly have to crawl under trains to cross tracks!
CJI Chandrachud: A legacy of landmark verdicts that shaped society and some controversy too
Neeraj Chopra to head to South Africa for off-season training later this month
Sensex, Nifty fall for 2nd day on FII selling; RIL, ICICI Bank major drag
Thanks for visiting Udayavani
You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.