Consultation Paper on applicability of SEBI (Prohibition of Insider Trading), Regulations, 2015 to Mutual Fund (MF) unit

Securities and Exchange Board of India has issued Consultation Paper on applicability of SEBI (Prohibition of Insider Trading), Regulations, 2015 to Mutual Fund (MF) unit. With respect to trading in Mutual Fund units, it is proposed to define Unpublished price sensitive information as any information pertaining to a scheme of a Mutual Fund which is not yet generally available and which could materially impact the Net Asset Value or materially affect the interest of unitholders, which shall include the instances where there is a likelihood of:

1. Change in the investment objectives of the concerned Mutual Fund Scheme(s);
2. A change in the accounting policy;
3. A material change in the valuation of any asset, or class of assets;
4. Conversion of a close ended scheme to an open-ended scheme or an open-ended scheme to a close ended scheme;
5. Restrictions on redemptions, winding up of scheme(s);
6. Creation of segregated portfolio;
7. Swing pricing framework will be triggered and swing factor will be made applicable;
8. Material change in the liquidity position of the concerned Mutual Fund Scheme(s)
9. Default in the underlying securities which is material to the concerned Mutual Fund Scheme(s)etc.

Comments are sought as to whether such independent platforms shall be the platform owned by AMFI or platforms collectively owned by all AMCs (like MFU)or be the stock exchange platforms (It may be noted that there is no compulsion to list units of open-ended schemes which constitute 98% of the AUM of the MF industry on the Stock Exchange.