Front Running

• SEBI recently barred 21 entities in the Axis mutual fund front-running case.
• It identified Rs 30.5 crore as wrongful gains accrued due to the alleged front-running activities and directed that this amount be impounded from the entities.
• Front running, also known as tailgating, is the prohibited practice of entering into an equity trade, option, futures contract, derivative, or security-based swap to capitalize on advance, nonpublic knowledge of a large pending transaction that will influence the price of the underlying security.
• Insider trading is when a company insider, an official, employee or a senior executive, takes advantage of unpublished price-sensitive information (UPSI) to trade in the company’s stock and make profits from such transactions.

About Securities and Exchange Board of India (SEBI)

• SEBI is a statutory body established in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.
• The basic functions of the Securities and Exchange Board of India is to protect the interests of investors in securities and to promote and regulate the securities market.
• SEBI Board consists of a Chairman , full time and part time members.
• SEBI is a quasi-legislative and quasi-judicial body which can draft regulations, conduct inquiries, pass rulings and impose penalties.