Introduction –
We have often seen that many Government employees or relatives of Government employees ask such kind of questions very frequently after joining the government duties/ can they be allowed to do a trading. In this block we will discuss this parameter in detail.
Can government employees trade in stocks, futures and options?
As per Central Civil service Code Act 1964, any employee of the government which can be central government, State Government, municipal corporation government, gazette officer, even a union territory government officer employee cannot read in stocks, futures, options on a short term, intraday, or even in swing trading small period of time.
The reason behind this rule is simple: futures and options , Intraday trading is a very high rest high Reward game. in such kind of scenario employee cannot focus fully other job along with it if he or she might faced so losses that can hamper their decision which can indirectly gonna affect the execution of government policies and rules regulations this is the main reserve according to Central civil service code act 1964, government employee cannot trade in intraday swing, futures, options or f & o segments.
Can relatives of government employees trade in the stock market?
Relatives of a government employee such as father , mother , spouse ,children , wife in short relatives with a direct Bloodline are also not allowed to trade in above mentioned sections of stock market. The sections are intraday, futures, options, swing , etc..
Reasons remain absolutely safe, which we already mentioned about because the highly volatile and the risk factor involved in above mentioned sectors are very high because of which it can influence the government employee financially to do activity as well as such activation which is inappropriate in government jobs.
Can government employees apply for IPO or FPO?
The answer is a big NO. As per Central civil service Code Act 1964, you cannot apply for an IPO that is initial public offering , Even you cannot apply for an FPO that is followed on public offering. a simple reason again lies in a code wish you mentioned about because of which government employees even there are numbers as well cannot apply for IPO as well as FPO.
In such restrictions, how can government employee find their way to invest?
as per Indian laws Government employees are allowed to do investing on a long term basis where you will going invest in a company for a major time period of more than 3 years, 5year, 7 years Etc. Rule this will be not considered as office it is allowed for the all categories of the employee but if you come under category A and B you have to declare it on every financial year that how much you have invested and what we stop your going to investing and all the details related to the your investment at the time of starting a financial year.
Conclusion –
As a government employee or even as a family member we can say of a government employee you have restrictions in doing trading in the stock market because of Indian laws that is central civil service Act 1964. you are restricted to do such kind of things in a stock market in case anyone found doing it illegally or even after knowing doing all these things it can be punishable offense and the person who is doing such illegal things are need to face the legal formalities or legal action against state by the government in which they are working with.
