you are at liberty to invest in mutual funds

2) you can invest in shares .

3) you should avoid trading in shares as it is risky proposition and you can incur losses

yes, it is permissible because it is an investment and it shall not come under business. if you can manage it without causing any loss of official duty then you can do it.

Investing in mutual funds has been encouraged by the government itself to all the sect of public. Therefore it is not investing in mutual funds is not illegal by a government employee, also investment in stock market including forex also is not illegal.

As per CCS (Central Civil Services) conduct rules 1964, investments in shares, debentures and mutual funds can be made by the Government servant. However "frequent buying and selling" of these are considered as "speculation" and is banned

2. Sub-rule (1) of Rule 16 also provides that no Government servant shall speculate in any stock, share or other investment. It has also been explained that 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.

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.

4. It is clarified that since shares, securities, debentures etc. are treated as movable property for the purpose of Rule 18 (3) of the CCS (Conduct) Rules, 1964 if an individual transaction exceeds the amount prescribed in Rule 18 (3), the intimation to the prescribed authority would still be necessary. The intimation prescribed in para 3 will be in addition to this, where cumulative transaction(s) i.e. sale, purchase or both in shares, securities, debentures or mutual funds etc. in a year exceed the limits indicated in para 3.

A government employee cannot indulge in active share market trading, they are barred from such activities under the provisions of civil services conduct rules.

You can invest in the share market as a long term or short terms investment, but indulging in trading activities is restricted.