Quant Mutual Fund has received inquiries from India’s stock-market regulator and is fully committed to complying with the review, the multi-asset manager said in a statement late Sunday.
The $11 billion manager said it will provide market regulator Securities and Exchange Board of India(Sebi) with all necessary support including supplying data on a regular basis.
The statement came after local news website Moneycontrol reported the regulator searched the fund’s Mumbai headquarters on suspected front-running, citing people it did not identify. Front-running is the trading of stocks by someone privy to information about a large impending transaction that will move prices, and is illegal in India.
A search and seizure operation was conducted at locations in Mumbai and Hyderabad, Moneycontrol said, citing one person. Quant dealers and people connected with the case were questioned on Friday, the report said, citing sources.
“We are dedicated to maintaining transparency and adherence to regulatory standards,” Quant Mutual Fund said in the statement, without giving details about the regulator’s actions or inquiry. Representatives of SEBI did not respond to calls and email seeking comment outside business hours.
Quant Mutual Fund is one of India’s largest asset managers and has been a key beneficiary of the surging inflows into stock market from local individual investors. A similar turn of events in 2022 at another mutual-fund business raised fears about increased regulatory scrutiny of the entire Indian mutual fund industry.
The report may also weigh on some smaller stocks held by the fund, such as lender RBL Bank Ltd, drug maker Aarti Pharmalabs Ltd and metal machinery maker Ador Welding Ltd.