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 for mutual fund units will come into effect from November 1, 2024.
Let us tell you that these rules were decided in November 2022 but now they are being implemented after the preparation of the industry.
What did SEBI say
SEBI said on Tuesday that insider trading rules for mutual funds will come into effect from November 1.
Under this, all transactions of more than Rs 15 lakh made by nominees, trustees, or their close relatives in the mutual fund of the asset management company (AMC) will have to be reported to the compliance officer within two working days.
The limit of Rs 15 lakh in all schemes except exempted schemes can be a one-time transaction or more than one transaction in a quarter.
What is the new rule
Investments made in mutual funds till October 31 will have to be reported to the stock markets by November 15. For subsequent quarters, companies will have to provide information within 10 days after the end of the quarter.
SEBI said, details of all transactions exceeding Rs 15 lakh per PAN or through various transactions in any quarter in the schemes of their mutual funds by nominees, trustees, and their close relatives, except exempted schemes, will be required.
This information has to be given to the compliance officer of the AMC within two working days of the transaction.
SEBI Previous Decision
Employees should avoid making profits from trading in the same security within 30 days and if they make any transaction, they have to tell the compliance officer about the reason for it.
The compliance officer will inform the board of directors and trustees of the AMC about it. SEBI had included trading in mutual fund units under insider trading rules through a notification in November 2022.
It was aimed at increasing integrity and transparency within asset management companies.