[Aditya Chhangani is a practising advocate at the Rajasthan High Court] The Bilateral Netting of Qualified Financial Contracts Act, 2020 (“Netting Act”) came into force with the goal of fostering stability and competitiveness in the Indian financial sector. In simple terms, netting means setting off any obligations or claims arising out of a Qualified Financial Contract (“QFC”). A single net...
Co-Extensive Liabilities and Subrogation Rights in Corporate Insolvency: The Supreme Court’s Stance
[Parth Birla is a fourth-year student at Hidayatullah National Law University, Raipur] Recently, the Supreme Court, in BRS Ventures Investments Ltd. v. SREI Infrastructure Finance Ltd., had the opportunity to interpret the overlapping mechanisms of the concept of Guarantee in the Corporate Insolvency Resolution Process. This case delves into the intricacies of the Insolvency and Bankruptcy Code...
Export-Import Regulations Do Not Ease Doing Business
[Jayesh H practises at the Trifecta of Law, Finance & Governance, and thanks Muskaan Shah for assisting with this post] The recent draft of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2024, issued by the Reserve Bank of India, has been projected as an initiative to streamline the export and import processes. Its primary objective is to enhance the...
Flawed Foundations: Challenging the Right of Ineligible Arbitrators to Nominate
[Abhishek Gupta is a fourth year B.A., LL.B. (Hons.) student at National Law University, Delhi] In arbitration, the interplay between party autonomy and procedural fairness often presents complex legal challenges. A key issue arises when considering whether an ineligible arbitrator should have the authority to nominate an arbitrator. This question places party autonomy, a fundamental principle of...
SEBI’s Move to Institutionalise Front Running in Mutual Funds
[Aryan Rawat is a 4th year B.A. LL.B. (Hons) student at National Law University, Odisha] On 5 August 2024, the Securities and Exchange Board of India (‘SEBI’) issued a circular to all asset management companies (‘AMCs’) and mutual funds (MFs), calling upon them to establish institutional mechanisms to curb front running and fraudulent securities transactions. This circular was issued at a time...
SEBI’s Finfluencer Legal Framework: Gaps in Enforcement and Investor Education
[Malini Mukherjee is a 5th year BBA LLB (Hons.) Student at Jindal Global Law School] On 27 June 2024, the Securities and Exchange Bureau of India (“SEBI”) convened its board meeting, where it approved norms to regulate financial influencers or ‘finfluencers’ (“the norms”). SEBI has defined finfluencers as individuals who provide advice on various financial topics and can influence the financial...
SEBI’s New Asset Class: Remodelling Mutual Funds into Hedge Fund Lites
[Parv Pancholi is a final year B.B.A. LL.B. (Hons.) student at National Law University Odisha, Cuttack] The Indian investment market continues to be an attractive hotspot for the domestic and foreign investors, offering a diverse range of financial products like mutual funds (“MFs”), alternative investment funds (“AIFs”), and portfolio management services (“PMSs”.) In recent years, a growing...
Aggressive for Passive: A Deep Dive into SEBI’s New MF Lite Regulations
[Yash Vardhan and Yuman Islam are 5th year students at Gujarat National Law University, Gandhinagar] The Securities and Exchange Board of India (“SEBI”) recently released a consultation paper introducing new regulations for passively managed mutual funds. The proposed regulations are called the “MF Lite Regulations.” This proposal aims to establish a more flexible regulatory framework for passive...
From Slabs to Simplicity: SEBI’s Regulatory Shift in Indian Brokerage
[Kevin Davis is a final year student at the West Bengal National University of Juridical Sciences] On 1 July 2024, the Securities and Exchange Board of India (SEBI) issued a circular, appropriately titled “True to Label”, which will alter the revenue structure and potentially dampen the rise of zero brokerage intermediaries in India. In brief, the impact of this circular is two-fold: first, it...
SEBI Broadens the Scope of Liquid Assets
[Shloka Mathur is a 4th year B.B.A LL.B. (Hons) student at National Law University, Odisha.] In its recent regulatory directive, the Securities and Exchange Board of India (‘SEBI’) has altered and expanded the scope of ‘liquid assets’ in its definition. These assets provide financial institutions with the necessary liquidity to manage risks effectively and ensure market stability. Liquid assets...
Instruments Issued to Non-Employees: Whether Securities Under SCRA
[Aayushi Choudhary is a 5th year student of Gujarat National Law University, Gandhinagar] In recent years, companies have increasingly sought innovative ways to incentivize and retain not only their employees but also non-employee stakeholders such as consultants, contractors, and business partners. This trend has given rise to complex financial instruments that blur the lines between traditional...
Striking a Balance: SEBI’s Fixed Price Method in Voluntary Delisting
[Ayush Gorana is a final-year B.B.A., LLB (Hons.) Student at Gujarat National Law University, Gandhinagar] In a significant regulatory development, SEBI in its board meeting on 27 June 2024 approved amendments to the SEBI (Delisting of Equity Shares) Regulations, 2021, thereby introducing the fixed price method as an alternative to the existing reverse book building (RBB) process for voluntary...
Managerial Remuneration – Should Promoters Be Disenfranchised?
[Bharat Vasani is Senior Advisor – Corporate Laws and Miloni Mau an Associate in the General Corporate Practice, both at the Mumbai office of Cyril Amarchand Mangaldas. An earlier version of this post was published on the Cyril Amarchand Mangaldas Blog] The Government of India’s socialistic approach towards controlling managerial remuneration between 1960s and 1990s has been a painful chapter in...
SEBI’s New Framework for Subordinate Units in InvITs
[Naman Kasliwal is a final year law student at Gujarat National Law University] The Government has estimated an investment requirement of around $1.4 trillion by 2025 in India’s infrastructure sector. To bridge this gap and fund this crucial sector, innovative financing mechanisms are essential. Infrastructure investment trusts (“InvITs”), introduced by the Securities and Exchange Board of India...
Value Chain Reporting in the BRSR: A Critique
[S Vishnu Ameya is a B.A., LL. B (Hons.) graduate from Damodaram Sanjivayya National Law University, Visakhapatnam] In recent years, disclosure of the environmental, social and governance (ESG) practices of a company have gained significant attention from investors, regulators, and stakeholders worldwide in building reputation, trust and managing risks. However, the question arose, whether such...
Assignment and Arbitration Agreements: Assignee’s “Burden” to Arbitrate
[Chiranth Mukunda is a 2nd Year B.A., LL.B. (Hons.) Student at National Law School of India University, Bengaluru] In DLF Limited v. PNB Housing Finance Ltd (22 March 2024), while considering a petition under section 11 of the Arbitration and Conciliation Act 1996 ( A&C Act), the Delhi High Court observed that an assignee would be bound by the arbitration agreement in a claim brought by the...
The Debate Over Supreme Court’s Curative Intervention in Arbitration
[Madhav Goel and Anjali Sharma are researchers at the TrustBridge Rule of Law Foundation] In April 2024, the Supreme Court of India in Delhi Metro Rail Corporation v. Delhi Airport Metro Express Private Limited (‘DMRC v. DAMEPL’) overturned an arbitral award of nearly Rs. 8,000 cr against the DMRC which was to be paid to DAMEPL, a joint venture between Reliance Infrastructure Limited and...
When a Rights Issue becomes Oppressive: A Look at Byju’s Recent Controversy
[Rituraj Singh Parmar and Priyam Indurkhya are 4th year B.A., LL.B. (Hons.) students at National Law Institute University, Bhopal] Think & Learn Private Limited, popularly known as Byju’s, has been facing several legal battles nationwide. In February 2024, the investors of Byju’s filed a petition for oppression and mismanagement with the National Company Law Tribunal, Bengaluru (“NCLT”). The...
Regulating the Stock Game: SEBI’s Norms for Fantasy Trading Platforms
[Garv Arora is 4th year B.A., LL.B. (Hons.) student at HNLU, Raipur] The Indian stock markets have witnessed an increase in the third-party platforms that provide virtual trading services based on real-time price data. The Securities and Exchange Board of India (‘SEBI’) has recently unveiled new norms for the dissemination of real-time securities price data to third parties, including various...
A Critical Analysis of SEBI’s Crackdown on Fantasy Trading
[Aamir Kapadia and Shivam Yadav are final-year BBA, LLB (Hons.) students at Jindal Global Law School] On 27 May 2024, the Securities and Exchange Board of India (“SEBI”) issued a circular, “Norms for Sharing of Real Time Price Data to Third Parties” (“the Circular”) to, inter alia, stock exchanges generally restricting them from sharing real-time market data with third-party entities (primarily...
Navigating SEBI’s New IPO Norms: Enhancing Transparency or a Burden?
[Shreya Saswati and Sruti Patra are 4th year B.A.LL.B. (Hons.) students at National Law University, Odisha] Recently, the Securities and Exchange Board of India (“SEBI”) sent a letter to bankers with a list of 31 advisory points on due diligence pertaining to initial public offerings (“IPO”). The IPO disclosure requirements at present are quite broad and clear. Starting from the preparation of...
CCI (Determination of Monetary Penalty) Guidelines, 2024: A Long-Awaited Move
[Srishti Multani, Amritanshu Pushkar, and Aryan Birewar are 4th Year BBA LLB (Hons.) students at Symbiosis Law School, Pune] On March 6, 2024, the Competition Commission of India (‘CCI’) notified the CCI (Determination of Monetary Penalty) Guidelines, 2024 (‘Guidelines’) to help the CCI determine the penalty to be imposed for infractions of the Competition Act, 2002 (‘Act’). They provided the...
Minimum Promoter Contribution Revisited: SEBI’s Amendment
[Adnan Danish and Zaier Ahmad are penultimate year BA LL.B. (Hons.) students at National Law Institute University, Bhopal ] Following the Union Budget for the fiscal year 2023-24, an Expert Committee was established under the chairmanship of Mr. S.K. Mohanty, a former Whole Time Member of the Securities and Exchange Board of India (‘SEBI’). The Committee’s mandate was to review the SEBI (Listing...
Revisiting the ‘Settled’ Law on MSMED and Arbitration Acts: An Alternative Way Forward
[Ameya Sharma and Tassawar Ali are second-year students pursuing B.A., LL.B (Hons.) from NALSAR University of Law, Hyderabad] In Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd., the Supreme Court settled the conflict between the Micro, Small and Medium Enterprises Development Act, 2006 [“MSMED Act”] and the Arbitration and Conciliation Act, 1996 [“A&C Act”]. It was...
Pitch It or Ditch It: Are Investor and Analyst Presentations Mandatory?
[Mythri Murali is a 5th year B.A., LL.B. (Business Law Hons.) student from National Law University, Jodhpur] Listed companies typically hold gatherings with analysts and investors after quarterly results or at least once a year to share information about their performance and future prospects. These meetings often include presentations, conference calls, group meetings, one-on-one interactions...
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