SIT tightens PIT disclosure for persons designated by MF

Capital market regulator SEBI has made it mandatory for asset managers (AMCs) to disclose details of assets of designated persons of AMCs, trustees and their immediate family members on an aggregated basis every quarter from November 1.

The shares on October 31 will be announced on the exchanges’ platform no later than November 15. Thereafter, for all subsequent calendar quarters, AMCs will provide the information within 10 calendar days of the quarter end.

To strengthen the regulatory framework regarding the prohibition of insider trading in mutual fund (MF) units, SEBI has notified the amended Regulation on the Prohibition of Insider Trading (PIT), which will come into effect from November 1.

To streamline the implementation of the PIT regulations, a working group was formed comprising representatives of AMCs, AMFI, stock exchanges, RTAs and Depositories, which made recommendations on the implementation of the new changes.

New standards

AMCs must disclose details of all transactions in the units of their own MFs executed by the designated persons, trustees and their immediate family members in excess of the threshold limit of more than ₹15 lakh, in one or a series of transactions during a calendar quarter, as per PAN for all schemes, with the exception of exempt schemes. The AMC compliance officer must ensure that disclosure takes place within two working days from the transaction date.

All employees must refrain from profiting from the purchase and sale of securities within a period of 30 calendar days from the date of their personal transaction, SEBI said.

However, if such deals are executed within 30 days, the employee will have to give an appropriate explanation to the compliance officer, who will have to inform the AMC board and the liquidators at the time of review, SEBI said.