Sebi tightens insider trading rules on quarterly disclosures from mutual funds. Top points here

The market regulator, Sebi, has tightened the regulatory framework regarding the prevention of insider trading in mutual fund units. Under the new regulations, Asset Management Companies (AMCs) are required to disclose information on the holdings of designated persons, trustees, and their immediate relatives in an aggregated manner on a quarterly basis starting from November 1, 2024 under the ambit of the SEBI (Prohibition of Insider Trading) rules.

The market regulator published a consultation paper in 2022 to gather input on proposed amendments to the rules on Prohibition of Insider Trading. The finalized recommendations will be implemented on November 1.

Top points

> The concerned individual must report all transactions exceeding the threshold amount in their own mutual funds to the Compliance Officer of AMC within two business days. 
> Specifically, any investment amount surpassing Rs.15 lakh per quarter must be promptly disclosed. 
> Furthermore, it should be noted that there are no limitations imposed by the market regulator on the investment and redemption of mutual fund units.
> AMCs are now required to disclose the holdings of 'Designated Persons' of AMCs, trustees, and their immediate relatives on a quarterly basis starting from November 1. 
> Going forward, these disclosures must be made within 10 days from the end of each quarter. The regulator has provided a specific format for disclosing the mutual fund holdings of senior employees of the AMC.
> Sebi has also modified Clause 6.6.2.3(f) of the Master Circular as that all employees shall refrain from profiting from purchase and sale or vice versa of any security within a period of 30 calendar days from the date of their personal transaction.
> “All employees shall refrain from profiting from the purchase and sale or sale and purchase of any security within a period of 30 calendar days from the date of their personal transaction. However, in cases where it is done, the employee shall provide a suitable explanation to the Compliance Officer, which shall be reported to the Board of the AMC and the Trustees at the time of review.”
> This circular is issued to protect the interest of investors in securities and to promote the development of, and to regulate the securities market.