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TMI BlogInvestment/trading in securities by employees 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 ..... bonds, warrants, derivatives and units of schemes floated by Mutual Funds / AMCs where the concerned persons (in terms of the applicability stated at Clause 1 of the said circular) are employed. These Guidelines do not apply to the following investments by the employees: i. Investments in fixed deposits with banks/financial institutions/companies, life insurance policies, provident funds (including public provident fund) or Investment in savings schemes such as National Savings Certificates, National Savings Schemes, Kisan Vikas Patra, or any other similar investment. ii. Investments of a non-financial nature such as gold etc, where there is no likely conflict between the Mutual Fund s interest and the employees interest. iii. Investments in government securities, money market instruments, money market mutual fund schemes, liquid schemes and schemes floated by other Mutual Funds/ AMCs. 2. Clause 1.2 of SEBI Circular dated May 08, 2001 on applicability of these guidelines shall read as follows: These Guidelines shall cover transactions for sale or purchase of securities made: i. In the name of employees, either individually or jointly, ii. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing) Regulations, 2015 shall be followed strictly by the Trustees, Asset Management Companies and their employees and directors. B. Considering that the provisions for investment / trading in Securities by employees of AMCs and Trustees are set out in various SEBI Circulars namely Circulars dated May 08, 2001, June 20, 2002, July 11, 2003, December 15, 2009, May 22, 2014 along-with amendments to these circulars provided at Point A above, for ease of reference these provisions are consolidated and provided at Annexure A. C. Applicability of the Circular The above circular will be applicable from December 01, 2016. This circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act 1992, read with the provision of Regulation 77 of SEBI (Mutual Funds) Regulation, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. Yours faithfully, Harini Balaji General Manager Tel no.: 022-26449372 Email: [email protected] Annexure A I. The guidelines enumerated below specify the minimum requirements that have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urities such as shares, debentures, bonds, warrants, derivatives and units of schemes floated by Mutual Funds / AMCs where the concerned persons (in terms of the applicability stated at Clause A1 above) are employed. b. These Guidelines do not apply to the following investments by the employees: i. Investments in Fixed Deposits with banks /Financial Institutions /companies, Life Insurance Policies, Provident Funds (including Public Provident Fund) or investment in savings schemes such as National Savings Certificates, National Savings Schemes, Kisan Vikas Patra, or any other similar investment. ii. Investments of a non-financial nature such as gold etc., where there is no likely conflict between the Mutual Fund s interest and the employees interest. iii. Investments in government securities, Money Market instruments, Money Market Mutual Fund schemes, liquid schemes and schemes floated by other Mutual Funds / AMCs. 2. No employee shall pass on information to anybody inducing him to buy/sell securities which are being bought and/or sold by the Mutual Fund of which the AMC is the investment manager. 3. Prior approval of personal investment transactions: a. All ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uota such as promoters quota, employees quota etc. Employees shall not participate in any private placement of equity by any company. b. Notwithstanding anything stated in (a) above, an employee of an AMC(s) and/or Trustees may apply for shares and/or debentures and/or bonds and/or warrants in a preferential offer, in cases where such a preferential offer is being made by a company that belongs to the same industrial group as the company in which the employee already has an investment, provided that such a preferential offer is made to all shareholders and/or debenture holders of such companies. Details of such applications made shall be intimated to the Compliance Officer. c. The employees of the AMC(s) and/or Trustees 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 and/or renounce his rights entitlement without getting the clearance from the Compliance Officer. How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in securities for market abuse. c. The Compliance Officer shall keep a track of the transactions of the employees and transactions of the Mutual Fund to ensure that there is no conflict of interest between them i.e. the Compliance Officer should track whether the Mutual Fund has transacted in the same securities either before or after the employee s transaction(s). d. The Compliance Officer shall maintain a record of all requests for pre-clearance regarding the purchase or sale of a security, including the date of the request, the name of the access person, the details of the proposed transaction and whether the request was approved or denied and waivers given, if any, and its reasons. e. No employee shall purchase any security (including derivatives) on a Carry Forward basis or indulge in Short Sale of any security (including derivatives) i.e. employees who effect any purchase transaction(s) shall ensure that they take delivery of the securities purchased, before selling them. f. Any transaction of Front Running by any employee directly or indirectly is strictly prohibited. For this purpose, Front Running means any transaction of purchase and/or sale of a securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change in the valuation of any asset, or class of assets and the same has not been communicated to the investors; e. There is a likelihood of conversion of a close ended scheme to an open ended scheme and vice versa and this has not been communicated to the investors. F. Periodic Disclosures 1. All access persons shall submit, in the form prescribed by the Mutual Fund of which the AMC is the investment manager, details of their personal transactions of purchase or sale of securities to the Compliance Officer. The details to be submitted are as follows: a. Details of transactions effected for purchase and/or sale of securities including transactions in rights entitlements through the secondary market within 7 calendar days from the date of transaction; b. Details of allotment received against application for public and rights issues within 7 calendar days from the date of receipt of the allotment advice; c. 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. All employees other than access persons shall submit, in the form prescribed by the Mutual Fund, to the Compliance Officer: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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