Quant Mutual Fund has been suspected of front-running by the Securities and Exchange Board of India (Sebi).
About Front Running:
- Front running is an unethical and illegal practice where traders exploit undisclosed information about impending large client orders to execute profitable trades before those orders are made public.
- In India, front running is strictly prohibited to uphold market fairness and protect investor confidence.
- The Securities and Exchange Board of India (SEBI) rigorously enforces regulations to prevent front-running, ensuring a level playing field for all market participants.
- The SEBI (Mutual Funds) Regulations were specifically amended in 2022 to enhance measures against front-running practices.
Impact on Financial Markets:
- Market Trust: Engaging in front running severely undermines trust in the financial markets, as it allows certain individuals to benefit at the expense of others.
- Unfair Advantage: Traders who engage in front running gain an unfair advantage by acting on information not yet available to the public, skewing market dynamics.
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