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Sebi steps in to curb front-running by mutual funds

Livemint

Livemint · 1y ago

Sebi steps in to curb front-running by mutual funds

The Securities and Exchange Board of India (SEBI) has approved amendments to mutual fund regulations to address front-running and fraudulent transactions. SEBI will establish an institutional mechanism that includes enhanced surveillance systems, internal control procedures, and escalation processes to curb misconduct such as front-running, insider trading, and misuse of sensitive information. SEBI has also streamlined prudential rules for passive mutual fund schemes to allow for increased exposure to group companies and approved greater flexibility for non-resident Indians and overseas citizens in certain foreign portfolio investors.

Related News

SEBI crackdown on Quant MF: What is front-running?

Livemint

Livemint · 1y ago

SEBI crackdown on Quant MF: What is front-running?

Market regulator SEBI conducted search operations at two premises of Quant Mutual Funds due to suspicions of front-running, a form of market manipulation. The operations took place at Quant's head office in Mumbai and Hyderabad. Front-running involves trading in a stock or financial instrument based on inside information about a future transaction that could affect its price. SEBI defines front-running as an unethical practice where brokers trade an equity based on information from the analysis department before their clients receive the same information. Quant Mutual Funds, with an AUM of over ₹90,000 crore, stated that it will cooperate with SEBI.

Quant mutual fund: A look at who they are, their philosophy, and success...

Livemint

Livemint · 1y ago

Quant mutual fund: A look at who they are, their philosophy, and success...

Quant Mutual Fund, one of the fastest-growing funds in India with over ₹90,000 crore AUM, has come under scrutiny by the SEBI for suspicion of front-running. The company has pledged full cooperation with the regulator. The fund follows a guiding philosophy of "being relevant" and relies on predictive analytics and objectivity. They offer various funds including quant Active Fund, quant Absolute Fund, quant Focused Fund, and more. The fund has delivered strong performance in the past, with its Quant Active Fund Growth delivering a CAGR of 31.36% over five years.

Quant mutual fund front-running case: Clients pulled ₹1,398cr days after SEBI probe, says founder-CEO Sandeep Tandon | Mint

Livemint

Livemint · 1y ago

Quant mutual fund front-running case: Clients pulled ₹1,398cr days after SEBI probe, says founder-CEO Sandeep Tandon | Mint

Sandeep Tandon, CEO of Quant Mutual Fund, revealed that clients withdrew $168 million (₹1,398 crore) in three days following news of an investigation by the Securities and Exchange Board of India (SEBI) into the fund's suspected involvement in front-running. Tandon assured investors that the fund is operating as usual and fully cooperating with SEBI. Experts believe the investigation will have minimal impact on investors due to the fund's investments in quality stocks.

Quant Mutual Fund’s AUM & NAV hits an all-time high for most schemes: Report | Mint

Livemint

Livemint · 1y ago

Quant Mutual Fund’s AUM & NAV hits an all-time high for most schemes: Report | Mint

Quant Mutual Fund's assets under management (AUM) have reached an all-time high of ₹94,000 crore, according to a recent report. The fund house informed investors about this amidst an ongoing investigation by the Securities and Exchange Board of India (SEBI) regarding an alleged case of front-running. Despite the scrutiny, Quant Mutual Fund reported net outflows of ₹696 crore, which is less than 1% of its AUM. The firm also stated that its liquidity situation is healthy, with over 54% of assets being liquid.

SEBI confirms involvement of LIC employee in front-running of a big client's trades

Money Control

Money Control · 1y ago

SEBI confirms involvement of LIC employee in front-running of a big client's trades

The Securities and Exchange Board of India (SEBI) confirmed that an employee of Life Insurance Corporation of India (LIC) was involved in the front-running of a major client's trades. The regulator served an interim order to the employee and four other entities, impounding over Rs 2.44 crore in illegal gains. The noticees have been restrained from accessing the securities market until further orders. SEBI initiated the investigation after receiving surveillance alerts of possible front-running between January 2022 and March 2022, examining trades from January 2020 to March 2022.

SEBI flags froth in small and mid-cap stocks

VCCircle

VCCircle · 1y ago

SEBI flags froth in small and mid-cap stocks

India's Securities and Exchange Board of India (SEBI) has expressed concerns about the inflated valuations of small and mid-cap stocks and the large inflows into mutual funds investing in these segments. SEBI has urged mutual fund trustees to evaluate whether lump sum investments in these funds are appropriate. The regulator recently requested mutual funds to disclose stress test results of small and mid-cap funds, enabling assessment of their ability to exit positions during times of stress. SEBI has also stated that it is gathering evidence on potential price manipulation in the small and medium enterprises' listings.

Ready to make Stewardship Code for mutual funds more effective, says Sebi member Amarjeet Singh

Money Control

Money Control · 1y ago

Ready to make Stewardship Code for mutual funds more effective, says Sebi member Amarjeet Singh

The Securities and Exchange Board of India (SEBI) is considering reviewing its Stewardship Code for mutual funds to enhance their role in improving corporate governance in listed companies. SEBI is willing to explore ways to make the code more effective, enabling mutual funds to engage and monitor portfolio companies more efficiently. The code sets principles and guidelines for funds to monitor governance, ESG, strategy, and conflicts of interest. As mutual funds' ownership stake in listed companies has significantly increased, they can actively contribute to better corporate governance practices through voting, engagement, and voicing concerns.

Why Mutual Funds Are Becoming the Top Choice for Middle-Class Families in India

Money Control

Money Control · 1y ago

Why Mutual Funds Are Becoming the Top Choice for Middle-Class Families in India

Mutual funds offer an accessible and affordable way for middle-class families in India to grow their money. With a minimum investment starting as low as Rs 500 a month, mutual funds are easy to start and offer flexibility for different financial goals. Expert fund managers handle the investment decisions, ensuring consistent growth. Regulated by the Securities and Exchange Board of India (SEBI), mutual funds provide transparency and protection for investors. Holding investments for more than a year also offers tax advantages. With these benefits, mutual funds are helping families achieve financial security.

SEBI allows MFs to invest in overseas funds with exposure to Indian securities

YourStory

YourStory · 9m ago

SEBI allows MFs to invest in overseas funds with exposure to Indian securities

The Securities and Exchange Board of India (SEBI) has announced that mutual funds in India are now permitted to invest in overseas mutual funds or unit trusts that allocate a specific portion of their assets to Indian securities. The exposure to Indian securities within these overseas funds must not exceed 25% of their net assets. This move aims to facilitate convenient investment in foreign mutual funds, increase transparency in investment processes, and allow diversification of foreign investments for mutual funds. The new framework is effective immediately.

Indian regulator asks fund managers to stop investing in overseas ETFs

Reuters · 1y ago

Indian regulator asks fund managers to stop investing in overseas ETFs

India's market regulator, the Securities and Exchange Board of India (SEBI), has instructed asset managers to halt inflows into schemes that invest in overseas exchange-traded funds (ETFs) from April 1. The directive comes as Indian mutual funds are nearing the $1 billion limit set by India on overseas ETF investments. The reason for the directive was not disclosed. The Association of Mutual Funds in India (AMFI) sent out an email notifying asset managers of the decision. Neither SEBI nor AMFI have provided further comments or clarification on the matter.

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