Government employees can lose service for frequent stock-market trading; check rules here

Trading in the stock market has become a norm nowadays as these investments can offer an additional sum to anyone. Even though there are a number of risk factors, people have been relying on stock trading for making a quick buck. While corporate workers have no restrictions with regards to stock-market trading unless their company ethics don’t permit them to do so, there are some limits for the employees associated with any government sector. In the worst-case scenario, if any employee violates the regulations, they can end up losing their job. This is because that government employees are not permitted to speculate as it is prohibited by the Central Civil Service (Conduct) Rules, 1964, which considers frequent purchases, sales, or both, of shares, stocks, or other investments to be speculative. A government employee is not only prohibited from doing so directly but also from doing so indirectly through another party. No government employee shall make, or authorise, any member of their family or any person acting on their behalf to start making any investment that is liable to embarrass or influence him in the discharge of his official duties, according to the Central Civil Service (Conduct) Rules, 1964. Implications of violating the rule: Depending on the seriousness of the misconduct, consequences for violating the aforementioned service conduct rule may range from withholding raises to removal from service. However, since the termination of service will be considered a forced retirement, retirement benefits, such as pensions, will not be impacted. In this context, Dr Suresh Surana, Founder of RSM India explained the rules properly to The Financial Express. He stated, “Government employees are not permitted to speculate on any stocks, shares, or other investments, under the rules of sub-rule (1) of Rule 16 of the Central Civil Service (Conduct) Rules, 1964. The frequent purchase or sale of shares, securities, other investments, or both, will be judged to be involved in speculation in accordance with the Explanation to sub-rule (1).” However, based on the first proviso of this sub-rule, government employees can occasionally invest money through stock brokers or other people who are legally authorised and licensed or who have acquired a certificate of registration under the relevant legislation. Notably, the “frequency of purchase/sale” is not specifically defined in the rules, which can cause confusion and legal disputes. As a result, each case’s facts and circumstances would be taken into account when deciding whether to classify something as an investment or stock. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.