On 27-06-2024, the Securities and Exchange Board of India notified the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) (Amendment) Regulations, 2024 (the Regulations) to amend the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003. These regulations came into force on 28-06-2024.
Key Points:
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Regulation 2(1)(b)(i) has been amended by the Regulations to include dealing in securities by the persons mentioned in the provision either themselves or through mule accounts.
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Inserts definition of ‘Mule Account’ providing that it includes trading account maintained with a stock broker or a dematerialised account or bank account linked with such trading account in the name(s) of a person, where the account is effectively controlled by another person, whether or not the consideration for transactions in the account are paid by such other person. The existing Explanation in Regulation 4(1) has been modified to explain that the fraudulent transactions and unfair trade practices that take place through mule accounts must always be considered to have been included in Regulation 4(1).
