Mutual Fund Regulation Violations in India

Security market regulation violations should be dealt seriously because it involves public money and deviations will lead to large scale economic repercussion. Mutual Fund (MF) stakeholders such as Asset Management Companies (AMC) have the duty and responsibility to adhere and comply with the rules and regulatory stipulated by the regulators, run in accordance to governance standards, maintain transparency and make money and wealth for its investors. However, at times, they are found to be deviating norms and causing loss to investors and putting investor trust and confidence to test. This paper examines and documents some deviations found in the mutual fund industry and now regulators dealt with them. We study several deviations that got unearthed from the famous 2003 US Mutual Fund Scandal and later from the 2010 front-running episodes in India. We also examine several incidents as observed in the Indian mutual fund industry and how SEBI dealt with them. This study is significant in the Indian context because it is witnessing increased inflow of money, mostly from small retail investors. Strong regulations act as essential foundation and the architectural plan of an investment building which investors build by pooling up their hard-earned money as bricks with the help of a mason called the fund manager. This paper gives some suggestions to regulators to make the foundation much stronger and everlasting.证券市场监管违规行为应予以严肃处置，因其涉及公共资金，且违规偏差将引发大规模经济连锁反应。包括资产管理公司（Asset Management Companies, AMC）在内的共同基金（Mutual Fund, MF）利益相关方，有义务遵守监管机构制定的各项规则与监管要求，按照治理标准开展运营，维持运营透明度，并为投资者创造收益与财富。然而，部分机构有时会偏离规范，给投资者造成损失，同时考验投资者的信任与信心。 本文梳理并记录了共同基金行业中出现的若干违规行为，以及监管机构后续的处置举措。本文以2003年美国著名共同基金丑闻，以及2010年印度曝光的抢先交易事件为样本，分析其中暴露的各类违规行为；同时还考察了印度共同基金行业中出现的多起违规事件，以及印度证券交易委员会（SEBI）的处置措施。 本研究在印度语境下具有重要意义：当前印度市场正迎来持续增长的资金流入，其中大部分来自个人散户投资者。健全的监管体系是投资大厦的核心根基与架构蓝图——投资者将各自辛勤积攒的资金作为建材，依托作为"泥瓦匠"的基金管理人搭建起这座投资大厦。本文最后向监管机构提出相关建议，以期进一步夯实并筑牢这一投资根基。