Mutual Funds Regulations: Capital market regulator SEBI (Securities and Exchange Board of India) has changed the rules to bring the sale and purchase of mutual fund units under the purview of Insider Trading Regulations. At present, the rules related to insider trading are applicable in the case of securities of listed companies. Apart from this, these rules also apply 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SEBI said, “No insider shall transact in units of any scheme of a mutual fund in the event of his becoming aware of any unpublished sensitive information, the net asset value of which is likely to be affected by that information.”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 AMCs, 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 the mutual fund units. To make this effective, SEBI has amended the rules of insider trading, which is effective from 24 November.
SEBI has brought some more guidelines for AMCs
Recently, SEBI had also issued some more guidelines for asset management companies. Under this, the dividend received by the mutual fund unitholders and the transfer of the amount received on unit redemption will have to be sent within a certain period. A notification issued on November 17 said that under the new rules, every mutual fund and asset management company will be required to pay dividend to unit holders and transfer the unit redemption or buyback amount within a period specified by Sebi, such that Those companies will be fined for not doing so.
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