The Sebi has notified that amended insider trading rules for mutual funds will come into effect from November 1.
“The board hereby appoints November 1, 2024, as the date on which the Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2022 shall come into force,” the gazette notification said.
The amended rules will require mutual funds to maintain a list of employees and individuals, known as “designated persons”, who can have access to unpublished price sensitive information. Designated persons are required to disclose the details of their holdings in the units of mutual fund schemes.
“Lists of all employees and other persons with whom unpublished price sensitive information is shared shall be maintained and confidentiality agreements shall be signed or notice shall be served to all such employees and persons,” according to the amended rules.
Experts said the amended rules will help bring in transparency within the AMCs and add an additional layer of security.
As per the norms, designated persons and their immediate relatives shall be governed by an internal code of conduct overseeing dealings in units of the mutual fund.
The amendment to the rules followed the episode at Franklin Templeton where a few executives were accused of selling their mutual fund units ahead of the fund house’s six debt funds shutting for redemption.