SEBI has come out with modified provisions for investment and trading in securities by employees of Asset Management Companies (AMCs) and trustees of mutual funds. Explain briefly the term "access person" under these pro

Background of Modified Provisions: SEBI, through its circular No. SEBI/HO/IMD/IMD-I DOF5/P/CIR/2021/654 dated October 28, 2021, introduced modified provisions for investment and trading in securities by employees of Asset Management Companies (AMCs) and trustees of mutual funds. The primary objective of these provisions is to prevent misuse of sensitive information and to ensure fair trading practices. To achieve this, a specific category of individuals termed "access persons" has been created. Explanation of "Access Person": An "access person" refers to an individual who, by virtue of their position or role, has access to or is likely to have access to sensitive information that could potentially be misused for personal gain in securities trading. The definition is broad and aims to cover all individuals who might possess non-public information that could impact the price of securities, the Net Asset Value (NAV) of schemes, or the interests of unit holders. Specifically, an "access person" shall mean: Key Management Personnel of AMC: This includes the Head of the AMC (designated as CEO/Managing Director/President or by any other name), Executive Director, Chief Investment Officer, Chief Risk Officer, Chief Operation Officer, Chief Information Security Officer, Fund Managers, Dealers, and Research Analysts. Employees in Critical Departments: All employees in the Fund Operations Department, Compliance Officer, and Heads of all divisions and/or departments, or any other employees as decided by the AMC(s) and/or Trustees. Non-Executive Directors and Trustees: Non-executive Directors of the AMC/trustee company or trustees who are in possession of/have access to any non-public information which could materially impact the price of the securities, NAV of the schemes, or interest of the unit holders, shall also be deemed as Access Persons. The inclusion of such a wide range of individuals as "access persons" is crucial to ensure that no one with potential access to sensitive information can take undue advantage of it, thereby upholding market integrity and investor confidence.