1. Home
  2. Blog
  3. UPSC

Front Running


Why is it in the news?

  • The Securities and Exchange Board of India (SEBI) has approved amendments to mutual fund regulations aimed at curbing front-running practices in India’s financial markets.

More about the news

  • Front-running involves trading in a stock or any other financial asset while possessing insider knowledge of a future transaction.
  • It typically occurs when a broker or investor takes advantage of privileged information about an upcoming large order or recommendation.
  • Front-running can be executed by a broker who is aware of a client’s impending order.
  • It can also be carried out by an investor who has inside information about a forthcoming recommendation from their firm.
  • Front-running is considered unethical as it enables the perpetrator to influence the price of the security by buying or selling before the large trade is executed.
  • This practice can potentially harm other investors by distorting market prices and depriving them of fair and equal opportunities in trading.

Get free UPSC Updates straight to your inbox!

Get Updates on New Notification about APPSC, TSPSC and UPSC

Get Current Affairs Updates Directly into your Inbox

Discover more from AMIGOS IAS

Subscribe now to keep reading and get access to the full archive.

Continue reading