Mutual fund industry in a bind over Sebi's new rules for executing trades

The Securities and Exchange Board of India’s (Sebi’s) diktat prescribing standards for exe­cuting trades may open a Pandora’s box for the mutual fund industry.

The regulations, which were notified in late October and lay down a code of conduct, have raised privacy concerns and may lead to longer working hours for fund managers.

A similar set of guidelines pertaining to trade execution and allocation were released on September 21 and become applicable from January 1. The notification states all communication by dealers as well as fund managers during market hours should be only through recorded modes and channels.

Currently, dealers’ conversations during market