The number of people investing in the stock market in India is steadily increasing. It includes people of all ages and income groups. Although everyone is allowed to invest money in the stock market, but the rules of investment in the stock market for government employees are slightly different and strict.
What do rules say?
Central Civil Services (Conduct) Rules, 1964 apply for the conduct of government employees in India. The purpose of these rules is to ensure that government employees do not misuse their posts and serve them honestly. According to these rules, government employees can invest in shares and debentures of listed companies, but with certain conditions.
Can government employees open Demat account?
Yes, government employees can open a Demat account to invest in stock market. Employees of both state and central levels get this facility, provided they follow the fixed rules.
Government employees can invest in mutual funds. Mutual funds are not considered betting because it is usually done for long term saving. But here too it is necessary to follow the rules.
What are the main conditions and restrictions?
Government employees can buy and sell shares, securities and debentures through recognized stock exchange, but there are some limitations:
- Banned Business Business: According to Rule 35 of Conduct Rules, government employees cannot be involved in speculative businesses such as day-trading or short-term trading.
- Invest in your name: Investments can always be made jointly with your name or a member of your spouse or dependent family.
- Repeated trading is forbidden: Frequent shares can be considered to be speculative activity. Therefore it is necessary to avoid this.
- Declaration of property is necessary: If the total value of investment or property is more than the basic salary of two months, then it is mandatory to inform it.
Why are these restrictions imposed?
The aim of these rules is that no government employee misuse his position or confidential information for personal benefit. Also, being involved in speculative business can also obstruct their government duties.
It is important to take care of these things
Government employees should keep a complete record of all their investments and follow their department guidelines. Living within the scope of rules, investing in mutual funds and long -term shares is a safe and intelligent option. Transparency and caution are always most important, so that any kind of investigation can be avoided.
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