ArchiveDecember 2013

SAT on Insider Trading and the Role of the Compliance Officer

A couple of years ago, we had discussed the order of SEBI’s adjudicating officer imposing a penalty of Rs. 5 lakhs (Rs. 0.5 million) on the compliance officer of Satyam Computer Services Limited. We had noted that this imposed a somewhat unduly onerous obligation on compliance officers and wondered “whether a different outcome would ensue if the compliance officer in Satyam’s case were to go on...

SEBI Proposal for Infrastructure Investment Trusts

Recognizing the deficit in financing infrastructure development in India, SEBI has floated a proposal for a separate investment vehicle for infrastructure investments. Last week, it issued a Consultation Paper on Infrastructure Investment Trusts, on which comments are invited from the public by January 20, 2014. SEBI’s rationale is to ensure that the lack of an effective investment framework does...

RBI’s Stance on Bitcoins and Other Virtual Currencies

Earlier this month, we had highlighted some legal issues pertaining to Bitcoin, as that form of virtual currency has been gaining ascendancy the world over. We had stated that the Reserve Bank of India (RBI), as the currency regulator, would certainly be seized of the issue. It now emerges that it is indeed the case. Yesterday, the RBI issued a press release warning users, holders and traders of...

Overhauling the Insider Trading Regulations: Part 3

[This is a continuation of two previous posts (here and here) in this series] Trading Plan The Committee has recommended the concept of a trading plan, which is novel in the Indian context but prevalent in some other jurisdictions. This concept has been recommended almost on an experimental basis, to be reconsidered by SEBI based on the initial experience. Such a trading plan has been found to be...

Overhauling the Insider Trading Regulations: Part 2

[This is a continuation of a previous post in this series] Operative Provisions The operative provisions (or charging provisions, as they are referred to by the Committee) go to the heart of the prohibition on insider trading, which also constitutes an offence for the breach thereof.  The scope of insider trading usually tends to capture two somewhat distinct but related aspects: 1. The...

The Law Governing the Arbitration Agreement and Ostensible Authority of an Agent

The influence of the principle of ‘severability’ of arbitration agreements, some may think, has extended far beyond the core problem it was intended to deal with: allowing an arbitral Tribunal to determine the existence or validity of the contract that contains the arbitration clause. Nor is it necessarily confined to arbitration agreements: the underlying principle is that a defendant who denies...

Overhauling the Insider Trading Regulations: Part 1

Background The legal regime governing insider trading in India is at least two decades old. The SEBI (Prohibition of Insider Trading) Regulations, 1992 were one of the initial few regulations that were prescribed by SEBI upon its establishment. However, the experience regarding the implementation of the legal regime on insider trading has been fraught with considerable difficulties. Although...

Sexual Harassment Act notified

The Ministry of Women and Child Development has notified December 9, 2013 as the effective date of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“Sexual Harassment Act”). The ministry has also notified the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013 which provide clarity in respect some of the...

Event Announcement: NLSIR Symposium

(The following notification comes from the National Law School of India Review) The National Law School of India Review (NLSIR), the flagship journal of the National Law School of India University (NLSIU), Bangalore is pleased to announce the VIIth NLSIR Symposium on “Bridging the Security-Liberty Divide” scheduled to be held on December 21 and December 22, 2013 at the National...

The Legalities of Bitcoin

The phenomenon of Bitcoin has taken the financial world by storm. A form of currency, although it came into existence only in 2009, it has increased exponentially both in usage and value. It has been said that the value of Bitcoin has appreciated by a whopping 5,000% in less than a year. This form of currency has gained momentum in India as well, as this report in the Mint suggests. US Court...

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