Insider Trading: Market regulator SEBI has fixed the date for implementation of insider trading rules for mutual fund units.
Insider Trading: There is big news for investors investing in mutual funds. Market regulator SEBI has fixed the date for implementation of insider trading rules for mutual fund units. According to the market regulator, insider trading rules will be applicable for mutual fund units from November 1, 2024. Let us tell you that the rules were decided in November 2022 itself but after the preparation of the industry, it has now come into effect.
Under the new rules, special attention will have to be paid to employees who have sensitive information. A list of employees and other persons who have access to sensitive information will have to be maintained. Also, such employees will have to sign an agreement. With its help, SEBI will be able to prevent insider trading.
In July 2022, SEBI issued a consultation paper on buying and selling of insider trading in mutual fund companies. However, due to opposition from the industry, the implementation of the new rules has been delayed. 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.
Under the new insider trading rules, those holding 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.
