Code of Conduct & Institutional mechanism for prevention of Fraud or Market Abuse

Last updated: 06 March 2021

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The Securities and Exchange Board of India (SEBI) has updated regulations to enhance the prevention of fraud and market abuse. Stock Exchanges, Clearing Corporations, and Depositories (MIIs) are now required to implement a Code of Conduct and an Institutional Mechanism. This includes formulating codes based on SEBI's PIT Regulations, appointing compliance officers, and establishing robust internal controls and inquiry procedures. MIIs must also have effective whistleblower policies with protections for employees who report concerns.

Securities and Exchange Board of India CIRCULAR SEBI/HO/MRD/DCAP/CIR/P/2021/23 March 03, 2021 To, All recognized Stock Exchanges, Clearing Corporations and Depositories Sir / Madam, Subject: Code of Conduct Institutional mechanism for prevention of Fraud or Market Abuse 1. Pursuant to the report of the Committee on Fair Market Conduct (Committee), set upinter-aliato recommend appropriate Institutional Mechanism to ensure accountability of the management / designated pers

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FAQ :

The circular aims to establish a Code of Conduct and an Institutional Mechanism for Stock Exchanges, Clearing Corporations, and Depositories to prevent fraud or market abuse.

The Managing Director (MD) / Chief Executive Officer (CEO) of the MII is obligated to frame the Code of Conduct, with the Board of Directors ensuring compliance.

The Compliance Officer is responsible for administering the Code of Conduct and the internal controls designed to prevent fraud or market abuse.

MIIs must establish adequate internal controls to prevent fraud or market abuse, have inquiry policies for suspected cases, and implement an effective whistleblower policy with employee protections.

The Regulatory Oversight Committee of the MII is responsible for reviewing compliance with the circular's provisions at least once a financial year.

This circular comes into force with immediate effect.

Notification No : SEBI/HO/MRD/DCAP/CIR/P/2021/23
Source : https://www.sebi.gov.in/legal/circulars/mar-2021/code-of-conduct-and-institutional-mechanism-for-prevention-of-fraud-or-market-abuse_49374.html

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