9911796707
TMI BlogInvestment/Trading in Securities by Employees of Asset Management Companies and Mutual Fund Trustee CompaniesX X X X Extracts X X X X X X X X Extracts X X X X ..... ransactions of employees and the mutual fund and interests of unitholders are not affected adversely. Association of Mutual Funds in India (AMFI) and the SEBI Advisory Committee on Mutual Funds made certain recommendations on investment/trading in securities by employees of Asset Management Companies and Mutual Fund Trustee Companies. After examining these recommendations, it has been decided that all mutual funds should take steps to implement the guidelines as enclosed herewith. These guidelines specify the minimum requirements that have to be followed. The asset management companies and mutual fund trustee companies have the option to set more stringent norms for investment/trading in securities by their employees. These guidelines are being issued in accordance with the provisions of Regulation 77 of the SEBI (Mutual Funds) Regulations, 1996. All mutual funds shall report Implementation of the guidelines to SEBI by May 22, 2001. Further, the boards of AMCs and trustee companies shall ensure the compliance of the guidelines on a continuous basis and shall report any violations and remedial action taken by them in the periodical reports submitted to SEBI. Yours faithfully, P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und's interest and the employees' interest. iii. investments in government securities, money market instruments and money market mutual fund schemes. 1.2. Type of Holdings : These Guidelines cover transactions for sale or purchase of securities made in the employees' name, either individually or jointly, and in the name of the employees' spouse and/or dependent children and transactions as a member of HUF. Further, no employee shall pass on information to anybody inducing him to buy/sell securities which are being bought/sold by the Mutual Fund of which the AMC is the investment manager. Investments in securities shall broadly be classified into investments through (a) primary markets and (b) secondary markets. 1.3. Prior approval of personal investment transactions: All access persons except Compliance Officer must apply in the form prescribed by the AMC/TC to the Compliance Officer of the AMC for prior approval of transactions for sale or purchase of securities other than those expressly stated to be exempt under these guidelines. The Compliance Officer must apply to the Head of the AMC. The decision of the Compliance Officer shall be final and shall be binding on the empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. Details of such applications made should be intimated to the Compliance Officer. 2.1.3. The employees of the AMCs/TCs including access person may apply for any rights offer of any company in which they are already shareholders. Applications for additional rights (over and above the normal rights entitlement) shares may be made by the employees including access person without getting the clearance from the Compliance Officer. An employee including access person may also sell/renounce his rights entitlement without getting the clearance from the Compliance Officer. However, if an access person wishes to purchase the "rights renunciations", he should get the clearance of the Compliance Officer for doing the same. Such purchases of rights renunciations should be done only at market prices. Details of any applications made in any rights issue, whether in the normal course, or through purchase of rights renunciations, shall be intimated to the Compliance Officer. 2.2. Investments through the secondary markets 2.2.1. An access person who wishes to make a secondary market transaction shall submit a written application to that effect to the Compliance Officer. Such an appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AMC also intends to purchase/sell the same security for its mutual fund operations. For the purpose of ascertaining that the employee had no prior knowledge of the Mutual Fund's intended transactions, the Compliance Officer may take a declaration in this regard from the employee. Such declaration may be included in the application form itself. 7. Any transaction of self-dealing by any employee either directly or indirectly, whether alone or in concert with another person is prohibited. For this purpose, 'self dealing' means trading in the securities based on information which is price sensitive in nature and to which he has access by virtue of his office. Declaration to this effect may be taken from the employee while clearing the proposals for investment. 2.2.8. On no account shall the employees insist or even suggest to the brokers concerned to charge reduced brokerage, or accept any contract with a reduced brokerage charge. INVESTMENTS IN UNITS OF MUTUAL FUND SCHEMES 3. Access persons as well as other employees do not require prior permission of the Compliance Officer for purchase or sale of units of mutual fund schemes. However, details of each such transaction, exclud ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
