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SEBI has alleged instances of front running at Quant Mutual Fund, according to media reports
Front-running is an illegal practice where an individual like AMC official or stock broker passes on the information of bulk buying by the fund house in a particular stock or company to the front runner (Generally, friends or family members). Based on this information, the front runner takes a big position in the stock to profit from price hike due to high demand by the fund house.
In a letter sent to investors, Quant MF admitted that it has received inquiries from SEBI. The fund house said, “We want to assure you that quant Mutual Fund is a regulated entity, and we are always fully committed to cooperate with the regulator throughout any review. We will provide all necessary support and continue to furnish data to SEBI on a regular and as-needed basis.”
Quant MF has emerged as one of the fastest growing AMCs. It manages AUM of Rs.59,000 crore as on March 2024.
Earlier in May, SEBI directed AMCs to put in place a mechanism to curb instances of front running and fraudulent transactions in execution of trades. The new system is expected to identify and deter potential market abuse.
