The Securities and Exchange Board of India (SEBI) on August 02, 2024, issued the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2024 to further amend Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.
The following has been stated namely: -
• Regulation 2 which states “Definitions” the following sub-regulation has been inserted namely: -
“(nb) “market abuse” includes manipulative, fraudulent and unfair trade practices which may contravene Section 12A of the Act or any of the provisions of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 or the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015”
• Regulation 25 which states “Asset management company and its obligations” the following sub-regulations have been inserted namely: -
“(27) The asset management company shall put in place an institutional mechanism, as may be specified by the Board, for the identification and deterrence of potential market abuse including front-running and fraudulent transactions in securities.
(28) The Chief Executive Officer or Managing Director or such other person of equivalent or analogous rank and Chief Compliance Officer of the asset management company shall be responsible and accountable for implementation of such an institutional mechanism for deterrence of potential market abuse, including frontrunning and fraudulent transactions in securities.
(29) The asset management company shall establish, implement and maintain a documented whistle blower policy that shall”
The provisions of sub-regulations (I) and (II) of Regulation 3 of these regulations shall come into force upon the completion of three months from August 02, 2024, and the provisions of sub-regulation (III) of Regulation 3 of these regulations shall come into force upon the completion of twelve months from August 02, 2024
[Notification No. SEBI/LAD-NRO/GN/2024/197]
