NEW DELHI
:
Competition Commission of India (CCI) has proposed to prevent its employees from specified investments, including any direct or indirect investments in commodity derivatives and equity-related investments other than certain exceptions like mutual funds, to protect the integrity of its regulatory decisions.
CCI employees are currently covered by central civil service rules, and the proposed norms seek to add explicit additional conduct requirements for the regulator like in the case of other regulators, including the Securities and Exchange Board of India (Sebi). CCI has sought public feedback by 6 April on the proposals before giving effect to them.
The draft rules disallow employees from making any direct or indirect investment in commodity derivatives, equity and equity-related instruments including convertible debentures and warrants.
However, investments in mutual funds, non-convertible bonds and non- convertible debentures, initial public offerings and in rights issues in respect of the shares already held by them are allowed.
In mutual funds, the investments go into a basket of different securities rather than to individual companies, making it an acceptable investment instrument for employees. The idea is to prevent any conflict of interest for the employees.
Ethical standards and conduct guidelines
The restrictions will also cover the investments of the employee’s dependent children, other wards managed by the employee as a guardian, spouse, dependent parents and dependent parents-in-law of the employee out of the money received from the employee.
“The nature of work in Competition Commission is commercially sensitive. The officials working in the Commission deal with confidential and commercially sensitive information received from various parties, which require high level of maintenance of confidentiality in handling such matters,” CCI said, explaining that the idea was to set high standards of ethics among the employees.
The draft rules also seek to prohibit speculation in shares, securities or commodities of any description. “No employee shall, when in knowledge of unpublished price sensitive information, encourage any person to deal in the securities to which it relates,” the proposed rules said.
The regulator also said that no employee should adopt dilatory tactics or wilfully cause delays in the disposal of the work assigned to him. The rules cover 36 specified areas including gifts, habitual indebtedness, secrecy, mis-use of official position and cooling-off period after retirement for taking up commercial engagements. The rules propose a one-year cooling-off period from retirement for accepting commercial employment except with the previous approval in writing of the Commission.
CCI has been holding public consultation before giving effect to its regulations and while issuing the final norms, explains why certain suggestions have been accepted or rejected.