TMI BlogInvestment/ trading in securities by employees and Board members of AMC(s) and Trustees of Mutual FundsX X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the circular dated November 17, 2016 as under: 2.1. Paragraph II(B)(2) of Annexure A of the circular dated November 17, 2016 , regarding the objectives of the guidelines and definition of access person , shall read as under: To ensure that the employees of AMC(s), Board members of AMC(s) and Board members of Trustees, including Access Persons shall not take undue advantage of any sensitive information that they may have about any company or its securities or about the AMC s schemes or its units. Access Person for the purpose of these Guidelines shall mean the Head of the AMC (designated as CEO/Managing Director/President or by any other name), Executive Directors, Chief Investment Officer, Chief Risk Officer, Chief Operation Officer, Chief Information Security Officer, Fund Managers, Dealers, Research Analysts, all employees in the Fund Operations Department, Compliance Officer and Heads of all divisions and/or departments or any other employee as decided by the AMC(s) and/or Trustees. Non-Executive Directors of the AMC/trustee company or trustees who are in possession of / have access to any non-public information which could materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of unexecuted portion, if any, shall not be allowed. However, a second request can be made within the financial year as stated at (a) above. g. The Access Person shall ensure that from the time of making an application under clause (d) till the conclusion of the sale of the concerned securities, he/she is not in possession of / does not have access to any non-public information which could materially impact the price of the concerned securities. Compliance Officer shall not grant clearance for such transaction, where the Asset Management Company is in possession of / has access to any non-public information which could materially impact the price of the concerned securities. h. The Compliance Officer shall maintain all other regulatory checks and obtain necessary undertakings from the Access Person. In case of pre-existing pledges / encumbered arrangements (i.e., securities pledged prior to becoming an Access Person), the provisions of cooling off period shall not be applicable in the event of sale of securities by lenders due to shortfall of margin, subject to the following: a. Access person shall, on the date of applicability of this circul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, including overnight scheme of their Mutual Fund, where any information available to the Mutual Fund is not yet communicated to the unitholders and which could materially impact the NAV or interest of unitholders, including scenarios where there is a likelihood of: a. a change in the investment objectives of the concerned Mutual Fund Scheme(s); b. a change in the accounting policy; c. a material change in the valuation of any asset, or class of assets; d. conversion of a close ended scheme to an open-ended scheme or an open-ended scheme to a close ended scheme; e. restrictions on redemptions, winding up of scheme(s); f. creation of segregated portfolio; g. material change in the liquidity position of the concerned Mutual Fund Scheme(s); h. default in the underlying securities which is material to the concerned Mutual Fund Scheme(s) etc. 3. All the provisions of this circular shall be applicable with effect from December 01, 2021 except for the provision at para 2.3 which shall be applicable from the date of this circular. 4. For ease of reference, the consolidated norms for investment / trading in secur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trust and responsibility. 2.2.2. To ensure that the employees of AMC(s), Board members of AMC(s) and Board members of Trustees, including Access Persons shall not take undue advantage of any sensitive information that they may have about any company or its securities or about the AMC s schemes or its units. Explanation : Access Person for the purpose of these Guidelines shall mean the Head of the AMC (designated as CEO/Managing Director/President or by any other name), Executive Directors, Chief Investment Officer, Chief Risk Officer, Chief Operation Officer, Chief Information Security Officer, Fund Managers, Dealers, Research Analysts, all employees in the Fund Operations Department, Compliance Officer and Heads of all divisions and/or departments or any other employee as decided by the AMC(s) and/or Trustees. Non-Executive Directors of the AMC/trustee company or trustees who are in possession of / have access to any non-public information which could materially impact the price of the securities, NAV of the schemes or interest of the unitholders shall also be deemed as Access Persons . 2.2.3. To guide employees of AMC(s) and Trustees in maintaining a high sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e access person shall not be valid for more than seven trading days from the date of approval. 2.3.3.5. If a transaction approved by Compliance Officer has not been effected within seven trading days from the date of its approval, the access person shall be required to obtain approval once again from Compliance Officer prior to effecting the transaction. 2.3.3.6. 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 clause shall not be applicable in case of investments and redemptions made in Mutual Fund units as per the provisions of SEBI circulars dated April 28, 2021 and September 20, 2021 on Alignment of interest of Key Employees ( Designated Employees ) of Asset Management companies with the Unitholders of the Mutual Fund Schemes . 2.4. Investments in Shares and/or Debentures and/or Bonds and/or Warrants and/or Deriv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ail discretionary Portfolio Management Services (PMS) subject to compliance with all applicable SEBI Regulations and circulars. AMCs and Trustees shall adhere to the guidelines issued by AMFI in this regard. 2.4.2. Investments through the secondary markets: 2.4.2.1. 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 application shall specify the name of the company whose securities the employee wishes to buy and/or sell, type of security, and the number of shares and/or debentures and/or bonds and/or warrants and/or derivatives that the access person wishes to buy/sell. 2.4.2.2. The Compliance Officer shall clear these requests if the following conditions are met: 2.4.2.2.1. If the shares and/or debentures and/or bonds and/or warrants of the company or derivatives specified by the access person are not held by any scheme of the Mutual Fund of which the AMC is the investment manager; 2.4.2.2.2. If such shares and/or debentures and/or bonds and/or warrants of the company or derivatives specified by the employee are held by any scheme of the Mutual Fund of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information which could materially impact the price of the concerned securities. Compliance Officer shall not grant clearance for such transaction, where the Asset Management Company is in possession of / has access to any non-public information which could materially impact the price of the concerned securities. (h) The Compliance Officer shall maintain all other regulatory checks and obtain necessary undertakings from the Access Person. 2.4.2.2.6. In case of pre-existing pledges / encumbered arrangements (i.e., securities pledged prior to becoming an Access Person), the provisions of cooling off period shall not be applicable in the event of sale of securities by lenders due to shortfall of margin, subject to the following: (a) Access person shall, on the date of applicability of this circular or on the date of joining the AMC or on the date of being designated as such, declare to the Compliance Officer, (i) details of all the pre-existing pledges / encumbered arrangements in which the securities held by him/her are pledged or encumbered and (ii) details of ESOPs bought with borrowed funds, along with the agreement with such lender. (b) Any instances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself. 2.4.2.7. 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 price sensitive information to which the employee has access by virtue of his office. Declaration to this effect may be taken from the employee while clearing the proposals for investment. 2.4.2.8. The employees shall not insist or suggest to the concerned brokers to charge reduced brokerage, or accept any contract with a clause on reduced brokerage charge. 2.5. Investments in units of Mutual Fund Schemes 2.5.1. Access persons as well as other employees do not require prior clearance of the Compliance Officer for purchase or sale of units of Mutual Fund schemes. However, details of each such transaction, excluding transactions in overnight schemes shall be reported by them to the Compliance Officer within 7 calendar days from the date of transaction. This clause shall not be applicable in case of investments and redemptions made in Mutual Fund units as per the provisions of SEBI circulars dated April 28, 2021 and Sept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , to the Compliance Officer: 2.6.2.1. Details of each of their transactions for purchase or sale of securities including allotment in public and rights issues within 7 calendar days. 2.6.2.2. A statement of holding in securities as on March 31 within 30 calendar days from the end of every financial year ending March 31. 2.6.2.3. A declaration shall also be included in the reporting form on the lines of clause 2.4.2.6 and 2.4.2.7 regarding Front Running and Self-Dealing. 2.7. Review by the Board of Directors of AMC and the Trustee(s) 2.7.1. The Board of the AMC and the Trustees shall review the compliance of these Guidelines in their periodic meetings. They shall review the existing procedures and recommend changes in procedures based on the AMC s experience, industry practices and/or developments in applicable laws and regulations. They shall report compliance and any violations and remedial action taken by them in their reports submitted to the Board. 2.8. Applicability of Insider Trading Regulations 2.8.1. Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 shall be followed strictly by the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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