14 points to remember before investing for MF employees

Last week, SEBI released a fresh set of investment guidelines for AMC employees. Read on to know what can you do and can’t do.

Investments MF employees can do (without informing the AMC beforehand)

1. Invest in fixed deposit, life insurance policies, provident fund, savings schemes such as National Savings Certificates, Kisan Vikas Patra etc. They are also allowed to invest in gold

1. Invest in schemes of other mutual funds. Apart from that, they are also free to invest in government securities and overnight scheme of the AMC they are employed with

1. Invest in public issue of shares, bonds and debentures. In case of allotment, they have to inform the AMC within 7 days

1. Participate in private placement of equity by any company, provided there's no conflict with the interest of unitholders

1. Apply for rights offer by a company in which they are already invested in 

1. Avail discretionary portfolio management services while adhering to all applicable SEBI regulations and AMFI guidelines

1. Invest in schemes of employer AMC, provided they inform the compliance officer within 7 days. In case of SIP, they have to inform only after the first transaction

Investments MF employees can do (after informing the AMC)

1. Invest money in securities through the stock exchanges. They are restricted from investing in instruments in which any of the scheme has investment in

Investment related activities MF employees can't do

1. Pass on investment information like securities being bought or sold by the mutual fund

1. Sell securities, including MF investments in employer AMC, within 30 days of purchase. In case an employee does so, he/she has to provide suitable explanation to the compliance officer

1. Indulge in 'front running', which means employees cannot trade in securities in which the AMC intends to transact anytime soon

1. Indulge in 'self dealing', which means employees cannot use non-public information available with the AMCs for personal investments

1. Purchase securities on a 'carry forward' basis or indulge in 'short sale' of any security. AMC employees can't sell a stock without taking delivery

1. Invest in a scheme (of the employer AMC) which is about to inform unitholders about a major change including shutting down the scheme, change in fundamental attributes, conversion from open-ended to close-ended among others