The Pension Fund Regulatory and Development Authority (PFRDA), through Circular No. PFRDA/2026/24/REG-PF/05 dated May 5, 2026, clarified that SEBI regulations relating to insider trading, self-dealing, and front running shall apply to all investments made under the National Pension System (NPS). Recognising that such matters fall within SEBI’s exclusive regulatory domain, PFRDA superseded its earlier 2019 circular on self-dealing and front running to avoid regulatory overlap and duplication. The circular mandates that pension funds, their directors, employees, key managerial personnel, and persons associated with NPS investment activities comply with the SEBI (Prohibition of Insider Trading) Regulations, 2015 and related frameworks. Pension funds are required to adopt SEBI-aligned codes of conduct, internal controls, monitoring systems, and employee training mechanisms. PFRDA will continue supervisory oversight by assessing governance standards and compliance mechanisms adopted by pension funds to ensure adherence to applicable SEBI regulations.
Pension Fund Regulatory and Development Authority
Circular No.: PFRDA/2026/24/REG-PF/05 Date: 05th May 2026
To:
CEOs of all Pension Funds
Subject: Applicability of SEBI Regulations relating to Insider Trading, Self-Dealing and Front Running to NPS investments – Supersession of PFRDA Circular dated 25 July 2019
1. Refer PF Regulations IV (b) CONFLICT OF INTEREST
‘A pension fund or any of its directors, or employee or an associate of the pension fund shall not, either through its account or their respective accounts or through their family members, relatives or friends indulge in any insider trading. Further, they shall adhere to the guidelines issued in this regard by the Authority from time to time’
2. Background:
PFRDA had issued Circular dated 25th July 2019 on “Guidelines on Self-Dealing, Insider Trading and Front Running” applicable to Pension Funds.
The insider trading, self-dealing and front running are matters falling exclusively within the regulatory domain of the Securities and Exchange Board of India (SEBI) under the securities market framework. SEBI has issued comprehensive regulations, circulars and guidelines governing these matters, which apply uniformly to all participants operating in the securities market.
3. PFRDA’s Regulatory Position and Clarification:
PFRDA hereby clarifies that:
a. All investments made under the NPS are undertaken in the securities market and form part of the SEBI-regulated market ecosystem.
b. Accordingly, SEBI regulations (Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015), circulars and guidelines relating to:
-
- Prohibition of Insider Trading,
- Prevention of Self-Dealing, and
- Prevention of Front Running,
shall apply mutatis mutandis, and to the extent applicable, to PFs, their directors, employees, key managerial personnel (KMP) and all other persons associated with NPS investment activities.
c. PFRDA shall not prescribe separate or parallel regulatory provisions on matters relating to insider trading, self-dealing and front running, in order to avoid regulatory overlap and duplication.
4. Supersession of the earlier PFRDA’s Circular:
In view of the above:
a. The PFRDA Circular dated 25 July 2019 on “Guidelines on Self-Dealing and Front Running” & Subsequent clarifications stands superseded with immediate effect.
b. Any references to the aforesaid circular in internal policies, codes of conduct or operational documents of PFs shall be read as references to the applicable SEBI regulatory framework, to the extent relevant.
5. Responsibility of Pension Funds:
Every Pension Fund shall –
a. Have a model code of conduct to prevent insider / personal trading of Officers involved in various levels of Investment Operations in compliance with SEBI (Prohibition of Insider Trading) Regulation, 2015 as amended from time to time and place the same before its Board of Directors for its approval.
b. Adopt, implement and maintain internal policies, codes of conduct and compliance frameworks consistent with applicable SEBI regulations.
c. Ensure that persons associated with NPS investment activities are adequately sensitised and trained regarding their obligations under the SEBI framework.
d. Enable appropriate systems for monitoring, reporting and escalation of any instances of insider trading, self-dealing or front running, in accordance with applicable law.
6. Supervisory Oversight by PFRDA:
PFRDA shall, in exercise of its supervisory powers under the PFRDA Act, 2013 and regulations made thereunder, assess the adequacy of governance, internal controls and compliance mechanisms adopted by PFs to ensure adherence to applicable SEBI regulations. Any deficiencies observed may be dealt with in accordance with the applicable regulatory framework.
7. Effective Date:
This circular shall come into force with immediate effect.
Yours faithfully,
Chief General Manager.
