Government employees always remain confused regarding stock market investment and many of them ask us Can Government employee invest in Share Market? For all of them we come with a detailed discussion regarding this issue.
Let’s understand the rules & regulations given in central civil services rules regarding the same topic. The following details are taken from the Central Civil Services (Conduct) Rules, 1964.
Table of Contents
Can Government employee invest in share market?
There are many questions regarding can government employee invest in share market in india. we will go though each of them one by one.
can govt employee do trading in stock market?
The answer is no you are not allowed to do intraday trading as per rule no. 35(1) which says no government employee shall trade in any stock, share, or similar investment, except for periodic investments done by stockbrokers or other individuals properly permitted and certified or who have received a certificate of certification under the applicable law.
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Explanation – Trading is described as the regular buying or selling or both, of stocks, commodities, or other investments within the context of this sub-rule.
Government employees allowed to acquire stake from promoters?
The answer is no, government employees are not allowed to acquire stakes from promoters. As per rule 40(i) No government employee can make, or authorize a member of his relatives or someone acting on his behalf to consider, any investment that could inconvenience or impact him in the performance of his official tasks.
For this reason, any acquisition of stocks from portfolios designated for Directors of Companies or their mates and partners would be considered an investment likely to inconvenience the Government servant.
Can a Government Employee apply for the IPO?
Yes, You can apply for the IPO. However, you must not be part of the price fixing process of the same company. According to the rule 40(ii) no Government employee engaged in the price determination phase for a Central Public Sector Entity’s Initial Public Offering or Follow-up Public Offering of stocks shall request for allotment of stocks in the Initial Public Offerings or Follow-up Public Offerings of a Government Business Enterprise, either personally or through any individual of his relatives or any other individual acting on his behalf.
Who’s Opinion is considered for doubt regarding can a govt employee invest in share market?
3. If there is any doubt as to whether an activity is of the kind described in sub-rule (35) or (40), the center Government’s opinion shall be decisive.
Can a Government Employee can do business with a bank or public limited firm?
This is another important question that comes to mind related to Can Government employee invest in Share Market? According to the rule No Government employee shall transact business with a bank or a public limited corporation either directly or through a relative of his family or another individual serving on his behalf.
Can a Government Employee take a loan from official connections or connect people?
The answer is no. As per the rules of Central Civil Services (Conduct) Rules, 1964 as a primary or representative, lend, borrow, or deposit funds to, from, or with any individual, organization, or private limited corporation within his local government or with whom he is likely to have official connections, or otherwise position himself in any monetary responsibility to such individual, organisation, or private limited entity is not allowed.
Can a Government Employee give a loan from official connections or connect people?
If he/she lends funds to someone at interest or in a way that charges or pays a return in funds or in nature that is not allowed. However, a Public official can give or accept a purely short term loan of a small amount without interest from a relative or close friend, or maintain a credit account with a bona fide tradesman, or offer an advance of pay to his private worker.
However, that none of these sub-rule applies to any activity engaged into by a Public official with the Government’s prior approval.
If anything which is not allowed is required to be done where can a government employee report?
When a Government employee is named or transferred to a position that would require him to violate the provisions of sub-rules given above he must immediately report the situations to the specified authority and then act in compliance with any order issued by that authority.
Conclusion
The government of India has put some rules on government employees for their own good and as well as keeping the general public in their mind. Hope are able to clear all the doubts regarding can government employee invest in share market in india?
This is all from our side regarding can government employee invest in share market. Although, if you have any doubts about can a government employee invest in stock market you can just comment below. Click here to open mutual fund account & get INR 100 on account opening for free.
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FAQ About can govt employee invest in share market
can a govt employee invest in mutual funds?
Yes, He/She can invest in Mutual funds.
can bank employee invest in share market?
Yes, He/She can invest in the Share market.
Whether a govt employee can do share trading?
No, Govt. Employees cannot do intraday trading. However, He can invest in Mutual funds without any issue.
Can govt employee spouses do intraday trading?
There is no such ban on it. However, If it is related to an employee's work in any way then it is not allowed.
Can a govt employee do intraday trading?
No, It's not allowed as per the rule book of civil services.
