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SEBI: Market regulator SEBI has set a date for making major changes for the mutual fund industry. To promote transparency in mutual funds, new rules for insider trading are going to be implemented from November 1. With the help of new rules, the functioning of asset management companies will also improve. Under the new rules, special attention will have to be paid to employees who have sensitive information. Also, such employees will have to sign an agreement.
Must sign a confidentiality agreement
According to market experts, under the new rules, mutual fund companies will have to maintain transparency about employees who have access to price sensitive information. Such employees will be considered nominees. They will be identified as nominees. Under the new rules, a list of employees and other individuals who have access to sensitive information will have to be maintained. All of them will have to sign a confidentiality agreement. This will help SEBI to prevent insider trading.
The implementation of the rules was delayed due to opposition from the industry
SEBI issued a notification on July 26 saying that the new insider trading rules will come into effect from November 1, 2024. Under the new rules, asset management companies will have to review their internal controls from time to time. SEBI had issued a consultation paper on insider trading and buying and selling in mutual fund companies in July 2022. But, according to market experts, the implementation of the new rules has been delayed due to opposition from the industry.
AMCs, trustees and their relatives will have to disclose their shareholding
According to the SEBI notification, under the new insider trading rules, those in possession of price sensitive information will no longer be allowed to trade mutual fund units. This information can affect the net asset value of the scheme as well as the interests of unit holders. Insider trading rules will not allow people to make unethical profits. Under the new rule, the AMC will have to disclose the details of holdings in the mutual fund scheme by the AMC, trustees and their relatives on the stock exchange. Also, information about transactions made by the nominee will have to be given within two days.
