Capital market regulator Securities and Exchange Board of India (Sebi) has directed mutual fund asset management companies (AMCs) to regularly keep a tab on social media platforms and take appropriate action against entities misusing names of mutual fund houses in a bid to lure investors into investing.
In a communication shared on November 30, 2022, Sebi has called for mutual funds to promptly take appropriate actions, including issuing a press release or public notice as well as filing a first information report (FIR) if the need arises.
The Sebi’s instructions come in the aftermath of a media article that revealed that fake Telegram groups have been targeting gullible potential investors by masquerading as genuine mutual funds.
The market regulator has called for the Association of Mutual Fund in India (Amfi) to advise all its registered mutual fund houses to remain vigilant against dubious entities misrepresenting on social media platforms.
Earlier, as several cases of insider trading in mutual funds came to light, Sebi had finally brought fund managers, directors of fund houses, trustees and other connected entities under the ambit of insider trading rules.
The market regulator had listed detailed guidelines in the gazette, in which it directed that the connected entities will include the board of directors and other key management personnel of the sponsor of the mutual fund, directors or employees of the registrar and share transfer agents and custodians or valuation agencies of the mutual fund who have access to classified information related to price sensitivity, which is unpublished yet.
Rajiv is an independent editorial consultant for the last decade. Prior to this, he worked as a full-time journalist associated with various prominent print media houses. In his spare time, he loves to paint on canvas.