SEBI (Prohibition Of Fraudulent And Unfair Trade Practices Relating To Securities Market) (Amendment) Regulations, 2024

Last updated: 01 July 2024

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The Securities and Exchange Board of India (SEBI) has introduced the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) (Amendment) Regulations, 2024. These new regulations, effective from their publication, aim to strengthen the prohibition of fraudulent and unfair trading practices in the securities market. Key amendments include the explicit inclusion of 'mule accounts' in the definition of fraudulent activities and clarifications on acts that manipulate company assets or financial statements to influence security prices.

SECURITIES AND EXCHANGE BOARD OF INDIA NOTIFICATION Mumbai, the 27th June, 2024 SECURITIES AND EXCHANGE BOARD OF INDIA (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING TO SECURITIES MARKET) (AMENDMENT) REGULATIONS, 2024 No. SEBI/LAD-NRO/GN/2024/187.In exercise of the powers conferred under Section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India

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FAQ :

The new regulations are called the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) (Amendment) Regulations, 2024.

These regulations come into effect on the date of their publication in the Official Gazette.

A 'mule account' is defined as a trading account with a stockbroker, or a dematerialised or bank account linked to it, held in someone's name but effectively controlled by another person, regardless of who provides the funds for transactions.

The amendments clarify that any diversion, misutilisation, or siphoning off of a listed company's assets or earnings, or any concealment of such acts, which manipulates the company's securities price, is deemed included in the prohibition of fraudulent practices.

Yes, transactions through mule accounts for engaging in manipulative, fraudulent, and unfair trade practices are now explicitly included and always deemed to have been included in the regulations.

Notification No : SEBI/LAD-NRO/GN/2024/187
Source : https://egazette.gov.in/(S(zwkasesif2rsfectfhn53axx))/ViewPDF.aspx

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