SEBI's Front-Running Control
Praveen Dubey (SEBI Registered RA)
SP RESEARCHVIA PVT. LTD. (INH000015808)
Securing Market Integrity and Fair Execution
Front-running represents a significant market misconduct where individuals trade ahead of large client orders to profit from the resulting price impact. SEBI has tightened rules to prevent this practice. At SP RESEARCHVIA PVT. LTD., we review the regulatory frameworks and broker surveillance systems.
What measures does SEBI mandate to prevent front-running?
SEBI requires mutual funds and brokerages to maintain digital logs of all communications, use automated surveillance systems to spot unusual trading patterns, and separate fund management teams from execution desks.
Surveillance Systems and Auditing
Modern surveillance systems use pattern-recognition algorithms to audit trades executed ahead of institutional orders. This helps regulatory compliance teams identify and address potential front-running activity.
Written by Praveen Dubey
Chief Research Analyst | SEBI Reg: INH000015808
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