PFRDA aligns NPS rules: SEBI insider trading norms apply to pension funds

In a circular dated May 5, 2026, the regulator said: “All investments made under the NPS are undertaken in the securities market and form part of the SEBI-regulated market ecosystem.”

It further clarified the applicability of SEBI regulations: “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.”

2019 circular withdrawn

With this, PFRDA has superseded its earlier July 25, 2019 circular on “Guidelines on Self-Dealing, Insider Trading and Front Running”, along with subsequent clarifications.

It further added: “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.”

Stricter compliance burden on pension funds

The regulator has placed responsibility on pension funds to strengthen internal governance systems and ensure strict compliance with SEBI norms.

Each pension fund must adopt a model code of conduct to prevent insider or personal trading by officers involved in investment operations and place it before its Board of Directors for approval.

Funds have also been asked to:

• Ensure training and sensitisation of staff involved in NPS investments.

• Implement systems for monitoring, reporting and escalation of violations.

• Maintain compliance frameworks consistent with SEBI regulations

PFRDA retains supervisory oversight

While aligning the regulatory framework, PFRDA said it will continue to exercise supervisory powers under the PFRDA Act, 2013.

The changes have come into force with immediate effect.

What this means for NPS investors

For subscribers of the NPS, the move is aimed at enhancing transparency, accountability and trust in how retirement savings are managed. By aligning with SEBI’s well-established market regulations, the regulator seeks to ensure that pension funds follow uniform standards similar to those of other institutional investors.