Sebi considers bringing MF transactions under insider trading ambit

The rules, if applied, would bring transacting in MF units at par with shares and would put the responsibility on top industry officials

The Securities and Exchange Board of India (Sebi) on Friday proposed bringing mutual fund (MF) transactions under the purview of stringent insider-trading regulations to prevent abuse of sensitive information by key personnel in the MF industry.

Currently, MF units are excluded from the definition of ‘securities’ under the Prohibition of Insider Trading (PIT) Regulations, and buying and selling of MF units is excluded from the definition of ‘trading’. The market regulator had sought public comments on whether the PIT Regulations need to be amended to also cover the MF industry.

The proposal comes close on the heels of allegations of front-running at