The implementation of the new regulatory norms by the Securities and Exchange Board of India (SEBI) requires all calls made by fund managers charged with making investment decisions during market hours, 9 am to 3.30 pm has left the executives dismayed.
According to the market watchdogs’ October 2020 notification, "all communications" during market hours must be made through “recorded modes and channels” only. This includes the private conversations of the fund managers in charge of taking investment decisions being recorded even if they talk to their family members.
The idea behind the code of conduct is to make the fund managers and dealers of Asset Management Companies (AMC) more accountable.
According to an Economic Times report, not only the fund managers are concerned with the new rules breaching with regards to their privacy but say that vital work-related calls are getting affected too as the companies and government officials, knowing their conversations will be recorded, are refusing to talk to AMC executives which may, fund houses fear, affect investment decisions negatively.
“The intention is to maintain appropriate evidence in case of a dispute or investigation but this does create a challenge and raises privacy concerns in case a fund manager has a personal conversation during market hours…this could include a conversation with his family or his bank,” said Moin Ladha, partner, Khaitan & Co. told the publication.
Reportedly, the impact was seen after the December quarter results when the companies holding talks with the fund managers refused to talk on recorded calls. A senior fund manager in the report said that they fear missing out on crucial investment input gained on these calls.
[Input from agencies]
