SEBI brings buying and selling of mutual funds under insider trading rules
New Delhi. Capital markets regulator SEBI has amended rules to bring buying and selling of mutual fund units under the ambit of insider trading rules. At present, insider trading rules are applicable in respect of securities of listed companies. Apart from this, these rules are also applicable to the companies proposed to be listed. Till now mutual fund units were kept out of the definition of securities.
Sebi’s latest decision comes in the wake of the Franklin Templeton episode, in which some executives of the fund house are alleged to have redeemed their holdings in six debt schemes before they were put under moratorium.
In a notification issued on Thursday, Sebi said, “No insider shall transact in units of any scheme of a mutual fund in the event of his becoming aware of any unpublished sensitive information, the net asset value of which is likely to be affected by that information.” Could.
Under the new rules, asset management companies (AMCs) will have to disclose the shareholding of the AMC, trustees and their close relatives in units of their mutual fund schemes.
Further, the compliance officer of the AMC will determine the closure period during which the designated person cannot deal in units of the mutual fund. To make this effective, SEBI has amended the insider trading rules, which are effective from 24 November.