Sebi targets AMCs in market abuse crackdown, operational challenges ahead
Read this | Surviving the front-running storm: An investor's handbook While industry experts applaud the intent, they also warn of potential unintended consequences. Sebi issued a circular on Monday amending the Mutual Funds Regulations, requiring AMCs to establish an institutional mechanism.
"This mechanism shall consist of enhanced surveillance systems, internal control procedures, and escalation processes, enabling the identification, monitoring, and addressing of specific types of misconduct, including front running, insider trading, and misuse of sensitive information," the circular states. Feroze Azeez, deputy chief executive, Anand Rathi Wealth Ltd, said that this move by Sebi is intended to keep AMCs vigilant against unscrupulous activities.
“AMCs must have systems in place to stop any potential market abuse, and the senior management of these AMCs are directly responsible for making sure these systems work well," he said, adding that Sebi is attempting to make investment world safer for everyone involved. “Stock exchanges, depositories, and Amfi (Association of Mutual Funds in India) is expected working together to share data, which helps keep this kind of scenario under check.
Sebi’s regular reviews and updates show their dedication to keeping the market secure and trustworthy, boosting investor confidence," he said. Experts acknowledge that while these measures might initially increase operational costs, they are expected to create a level playing field for all market participants in the long run.
The circular mandates that the chief executive officer (CEO) or managing director, along with the chief compliance officer of the AMC, will be responsible for implementing the mechanism. AMCs must establish an
. Read more on livemint.com
