Advocate Krati Joshi

Questions Answered by Advocate Krati Joshi (25+ answers)

Q: can a govt employee do f&o trading ?

I am a govt PSU employee. Can I invest in stocks?, can psu employee do intraday trading

Advocate Krati Joshi answered
There is no absolute ban on investing in stocks however speculative trading (may include derivative trading) is not allowed. Also, it depends on the rules and regulations of the Organization.As per CCS (Central Civil Services) conduct rules 1964, investments in shares, debentures and mutual funds can be made by the Government servant. However "frequent buying and selling" of these are considered as "speculation" and is banned. Also for transactions above certain value, the government officers have to inform prescribed authorities.Here is the excerpt of the rules:(32) Transactions in sale and purchase of shares and debentures etc.The provisions of sub-rule (4) of Rule 18 of the CCS (Conduct) Rules, 1964 provides that the Government or the prescribed authority may, at any time, by general or special order, require a Government servant to furnish within a period specified in the order, a full and complete statement of such movable or immovable property held or acquired by him or on his behalf or by any member of his family as may be specified in the order. Such statement shall, if so required by the Government or by prescribed authority, include the details of the means by which or the source from which, such property was acquired.2. Sub-rule (1) of Rule 16 also provides that no Government servant shall speculate in any stock, share or other investment. It has also been explained that frequent purchase or sale or both, of shares, securities or other investments shall be deemed to be speculation within the meaning of this sub-rule.3. It has been brought to the notice of the Government that a number of employees are investing in shares, securities and debentures etc. frequently. With a view to enable the administrative authorities to keep a watch over such transactions, it has been decided that an intimation may be sent in the enclosed proforma to the prescribed authority in the following cases :-(i) Group ‘A’ and ‘B’ Officers – If the total transaction in shares, securities, debentures or mutual funds scheme etc. exceeds Rs. 50,000/- during the calendar year.(ii) Group ‘C’ & ‘D’ Officers – If the total transactions in shares, securities, debentures or mutual funds scheme etc. exceeds Rs. 25,000/- during the calendar year.4. It is clarified that since shares, securities, debentures etc. are treated as movable property for the purpose of Rule 18 (3) of the CCS (Conduct) Rules, 1964 if an individual transaction exceeds the amount prescribed in Rule 18 (3), the intimation to the prescribed authority would still be necessary. The intimation prescribed in para 3 will be in addition to this, where cumulative transaction(s) i.e. sale, purchase or both in shares, securities, debentures or mutual funds etc. in a year exceed the limits indicated in para 3.