Most of the Government Employees are indirectly investing in Equity Share Markets via NPS (New Pension Scheme) and PPF (Public Provident Fund) Contributions which find their way directly into Equity Share Market.
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Can Government Employees Invest & Trade in Share Market?
I have been associated with Equity Market for the Past One Year. I have been investing in Mutual Funds & Share market since January 2017. On a busy day in office , one of my Colleague Warned me that “ Govt employees are barred from Investing in Stock Market and he also added that Public Servants involved in Stock Market trading will be penalized legally .
His words Stirred me a lot and I started googling various articles and discussed with my Lawyer Friends about this matter, finally found a solution – “ Yes Government employees are not barred from Equity market investment”
In other words Most of the Government Employees are indirectly investing in Equity Share Markets via NPS (New Pension Scheme) and PPF (Public Provident Fund) Contributions which find their way directly into Equity Share Market.
Are Government Employees allowed to Invest in Equity Share market? (From Legal Perspective)
A. Rule 15 of CCS (Conduct) Rules, 1964 strictly bar a Govt. servant from being a partner in a firm. However, where there is no direct prohibition from buying or selling shares.
B. 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.
C. Investment in shares, mutual funds etc are to be intimated to the Department at the end of every calendar year as per the ref.: DoPT OM No. 11013/6/91-Estt. (A) dated 8.4.92 regarding CCS [Conduct] Rules, 1964—Transactions in sale and purchase of shares and debentures etc.
If you’re an Government Employee, and planning to Invest in equity for long term, Go ahead, and Don’t forget to disclose the Same in your Yearly Property Statement.
Better avoid Short term / Intraday Trading – which is Clearly mentioned in 2nd point above.
If you’re a Trader (Short Term /Intraday), better Open a Demat Account in the Name of your Spouse /Father/Mother and Carry on your Trade