Who is Sandeep Tandon, what is front running? All about Quant Mutual Funds
🔸 What is Quant Mutual Fund?
Quant Mutual Fund is in the news amid reports of alleged irregularities in investment-related activities by its fund managers. In other words, the market regulator, Securities Board of India (SEBI) finds the case of front running by select money managers in quant mutual funds suspicious.
According to sources, SEBI on Friday raided the Mumbai and Hyderabad offices of Sandeep Tandon-owned Quant Mutual Fund.
Sources said the market regulator has taken this step after anomalies were found during regular inspections. Audit firms had also raised concerns following their inspections, which they had handed over to SEBI.
🔸 Who is Sandeep Tandon?
Sandeep Tandon is the founder of Quant Group, with over 25 years of experience in the financial services industry. Currently, Sandeep Quant oversees investment decisions across 22 schemes in the mutual fund.
In the past, Sandeep Tandon was part of the core team of IDBI Asset Management, now known as Principal Asset Management; He was vice president at ICICI Securities and part of the Economics Times Research Bureau.
🔸What is front running?
Front-running refers to an unethical and illegal practice of making profits from the stock market.
In general, front-running or forward trading is a practice in which stock brokers/dealers or fund managers act with advance knowledge about the placement of large orders on a particular counter.
According to SEBI, in case of front running – stock brokers already have information related to investors' orders. They use this information to trade and make profits in their personal trading account.
In simple terms, a fund manager has confidential information about the fund's trading activity in a particular stock, which can have a significant impact on the share price that day. The fund manager passes the said information or makes similar trades to the proxy trading account before the deal to take advantage of the possible sharp price movement.