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The Securities & Exchange Board of India (SEBI) is making it mandatory for Asset Management Companies (AMCs) to have an institutional mechanism for deterrence of potential market abuse.
Key points regarding recent update by SEBI |
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Asset Management Companies (AMCs):
- These are financial institutions responsible for managing and investing funds pooled from investors in various financial assets such as stocks, bonds, and other securities.
Insider Trading:
- Insider trading is the trading of a public company’s stock or other securities based on material, nonpublic information about the company.
Front Running:
- Front-running is trading stock or any other financial asset by a broker who has inside knowledge of a future transaction that is about to affect its price substantially.
Front-running is commonly confused with insider trading, but they are distinct. Insider trading refers to a company insider who trades on advanced knowledge of corporate activities–for example, using their insider knowledge to buy or sell shares ahead of a major announcement. |
