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19 Nov 2024
The Securities and Exchange Board of India (SEBI) has been conducting unannounced inspections of top mutual fund executives, examining their digital devices, including mobile phones, iPads, and laptops.
These inspections have targeted five leading mutual funds over the past 12 months, focusing on top executives' mobile phones.
Sources indicate these inspections are distinct from the search and seizure operation at Quant Mutual Fund on June 28. SEBI refers to these inspections as "thematic inspections," which involve reviewing records from multiple mutual funds to gather information on block deals, concurrent trades, and broker communications.
The primary aim of these surprise inspections is to analyze patterns and identify any irregular or questionable practices.
SEBI's actions are intended to ensure compliance and detect potential malpractice within the mutual fund industry.
An anonymous executive from an affected asset management company expressed concerns about the invasiveness of these inspections, saying, "Information spreads fast.
People who need to reset their phones have already done so. But even if you have nothing to hide professionally, accessing personal digital devices is disturbing."
Additionally, SEBI has directed stockbrokers to establish an institutional mechanism to detect and prevent fraud and market abuse. This initiative aims to boost confidence in the securities market.
The SEBI circular, effective July 4, states that these provisions will be implemented in a risk-based, staggered manner to allow brokerages time to make necessary adjustments based on their size.
On May 22, SEBI released a master circular for stockbrokers covering registration, supervision, dealings with clients, default-related provisions, and investor grievance redressal mechanisms.
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