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Insider trading rules to cover MF units too

Mumbai, Oct 1, 2022

Markets regulator Sebi has said that all top officials at mutual funds will now come under insider trading rules. At present, all trading in stocks are under the active surveillance mechanism of the regulator. Soon, a similar, tech-driven mechanism will be in place for mutual funds.

Currently, trading in shares of a company by its officials are covered under the insider trading regulations. Sebi will now include a chapter within these regulations to cover units of MFs too, Sebi chairperson Madhabi Puri Buch said.

The new chapter will include definitions of unpublished price-sensitive information, generally available information and other related terms for mutual funds, a Sebi release said. A separate code of conduct would be there, in line with the existing Sebi regulations for designated persons in respect of MFs and reporting & monitoring requirements with respect to transactions in MF units by designated persons. Fund houses will also need to frame internal guidelines for investing in mutual fund units by its top officials, a top Sebi official said.

Sebi also said that, very soon, ALL MF investors will get their redemptions of units within a maximum seven days, down from 15 days that some fund houses take. “The board approved amendment to Sebi (Mutual Funds) Regulations, 1996 to facilitate faster payout of redemption and dividend to unitholders by AMCs from existing 10 working days and 15 days respectively to such period as may be specified by Sebi from time to time, proposed as three working days and seven working days,” it said.

[The Times of India]