I am a Govt. employee and made a Zerodha account for trading. But today while searching in internet I got an information from some forum that a Govt. employee can not do intra day or speculative short term or intraday trading. With a view to enable the administrative authorities to keep a watch over such transactions for investing in shares, securities and debentures etc. frequently by the employees, it has been decided that an intimation may be sent to the prescribed authority if the total transactions in shares, securities, debentures or mutual funds scheme etc. exceeds Rs. 50000/- during the calendar year in case of Group ‘A’ & ‘B’ Officers and so on.
Since after office hour I can manage to invest in commodity and here the transaction crosses manifold and like stocks you can not invest for long time. So in this case will I be able to continue to do so? I got nobody around to take some advice in this regard.
Let me bounce this off a few lawyer friends of mine. But personally what I think is, as long as you being a government employee don’t get access to privileged news which could make what you are trading go up or down, it should be okay.
But best to find out from your govt organization that you are working for.
You can check this link, http://www.lawyersclubindia.com/forum/Equity-market-for-govt-employee-73193.asp#.VJCGuS4YMkN
The CCS (Conduct) Rules,1964 says , "No Government servant shall speculate in any stock, share or other investment:
Provided that nothing in this sub-rule shall apply to occasional investments made through stock brokers or other persons duly authorised and licensed or who have obtained a certificate of registration under the relevant law.
Explanation - Frequent purchase or sale or both, of shares, securities or other investments shall be deemed to be speculation within the meaning of this sub-rule."
So I don’t get what is frequent purchase or sale or both to be speculation? Is commodity trading within a day or one to day after comes under this since commodity derivative transactions are no longer to be treated as speculative transactions as per one of the amendments carried out by the 2013 budget was the introduction of commodities turnover tax (CTT), effective 1 July, 2013 (Source : http://www.livemint.com/Money/F49uFpSmVccTsb5mvy5OoJ/Commodities-trading-no-longer-speculative.html)?
Another clause i.e. Sub-rule 3 of Rule 18 of CCS(Conduct) Rules,1964 (32) 3. It has been brought to the notice of the Government that a number of employees are investing in shares, securities and debentures etc. frequently. With a view to enable the administrative authorities to keep a watch over such transactionS, it has been decided that an intimation may be sent in the enclosed proforma to the prescribed authority in the following cases :-
(i) Group ‘A’ and ‘B’ Officers – If the total transaction in shares, securities, debentures or mutual funds scheme etc. exceeds Rs. 50,000/- during the calendar year.
(ii) Group ‘C’ & ‘D’ Officers – If the total transactions in shares, securities, debentures or mutual funds scheme etc. exceeds Rs. 25,000/- during the calendar year.
In this case I have found a Gazette Notification in respect of amendment of Sub-rule 3 of Rule 18 of CCS(Conduct) Rules,1964 and you may find it in the following link: http://www.bis.org.in/qazwsx/oth/Vig.pdf
Actually I have not find any quality answer from my office and before going deep into it I just want to get clarified. SO does it mean if I just (I) inform my authority regarding my opening of trading account and (II) as per the amendment intimate the transaction amount if the particular transaction exceeds my two months basic pay, then it will work!
Please suggest me and let me know if you found any better clarification for me.
Hii, my father is in BMC (BHRUHAMUMBAI MUNCIPAL CORPORATION).HE is in Waste department he is an supervisor. So can I trade with his account. But the thing is that, I have open the demat account .So can I trade.
Those who are here for the same queries in their mind let me update you first. In 2019 Government has changed the rules. As per new rule you can now do yearly transactions upto 6 times your basic pay provided you dont indulge in intra day trading but only long term share investment. This you can check even by googling.
I think that share trading and derivatives are considered businesses and it is a rule that government employees are not supposed to run other businesses while they are employed with the government. Hence, this rule.