Sebi to review front-running regulations to curb fraud
Sebi chariman UK Sinha has said that the review would look at the definition of front-running so that orders challenged at the appellate body or even the higher courts can stand the test of law. “On this particular aspect of front-running, we will have to have look at our regulations to see if it needs more improvement and strengthening,” Sinha said on Sunday.
Front-running refers to an illegal practise where a stockbroker executes orders on a security for his or her own account taking advantage of advance knowledge of pending orders.
Front-runners use confidential information for buying or selling securities ahead of a large order with the objective of benefiting from the subsequent price movement.
“Front-running as an offence is definitely pursued to be for intermediaries. So (does) somebody who is an indirect beneficiary comes under the purview or not? Of course, common sense and justice demands that it should be there,” Sinha said.
On November 9, the SAT overruled an order passed by Sebi wherein an employee of a portfolio manager of a foreign institutional investor (FII) was barred from the market for front-running activities. According to the Sebi probe, Dipak Patel, who was working with Passport India Investment (Mauritius), passed on information related
Be the first to comment.
