In its board meeting held on August 4, 2010, SEBI introduced three changes to its norms requiring disclosure of shareholding patterns of listed companies. 1. Listing: The first change relates to companies undertaking an IPO. The current regime requires disclosure of shareholding pattern in the offer document and thereafter (after listing) on a quarterly basis with the stock exchanges under the...
Viability of Mandatory CSR
CNBC reports on a proposal by the Government to require companies to introduce mandatory CSR spending: Corporate social responsibility (CSR) spends will now be made mandatory for corporate India, sources in the Ministry of Company Affairs told CNBC-TV18. If approved, companies will have to spend 2% of the average net profit on CSR. Mandatory CSR will be made part of the amendment to the Companies...
Further Measures to Boost Infrastructure Financing
In continuation of previous measures, the Reserve Bank of India (RBI) has taken additional steps to enable financing in the infrastructure sector. First, the proposed introduction of credit default swaps on corporate bonds (discussed here) covers corporate bonds issued by Special Purpose Vehicles (SPV) of rated infrastructure companies “keeping in view the need for development of the...
RBI Proposes Credit Default Swaps on Corporate Bonds
The Reserve Bank of India (RBI) has issued a draft report that proposes the introduction of credit default swaps (CDS) for corporate bonds. Comments are due on the proposal by October 4, 2010. The move to create a market for CDS in India has been delayed for the last few years due to a lack of adequate risk management systems and lessons learned from the financial crisis (where CDS is alleged to...
Should Shareholders Pay for Corporate Misconduct?
The U.S. SEC’s settlement last week with Citigroup has revived the debate about the efficacy of payments by way of settlements, fines and penalties by companies as a consequence of breaches of law. Under this settlement, Citigroup is required to pay $75 million for making “misleading statements about the extent of its holdings of assets backed by sub-prime mortgages in earnings calls and public...
Interpretive Guidance in Rule-Making
While reading the Supreme Court’s judgment in the Daiichi case, which Mihir has discussed here, I was particularly struck by certain observations of the court that appear at the end of the judgment. The case involved an intensive reading and close interpretation of the provisions of the SEBI Takeover Regulations. Here are the relevant observations: 57. Before parting with the records of the case...
Regulating Bankers’ Pay
Consistent with international trends to impose greater regulation on executive compensation in banks, the Reserve Bank of India (RBI) has issued draft guidelines on compensation of whole time directors/ chief executive officers / risk takers and control function staff. This applies to private sector and local area banks and all foreign banks operating in India, and is in addition to tight...
Physical Settlement in Derivatives Trading
Over a decade ago, when trading in derivatives was commenced on Indian stock exchanges, it was decided that such instruments must be introduced in a phased manner. This was following the recommendations in the L.C. Gupta Committee report. Consequently, various types of derivatives were introduced at different points in time – index futures, futures in specific securities, options and so on...
NALSAR Student Law Review: New Issue
The latest issue of the NALSAR Student Law Review (which is available online) carries a number of articles that may be relevant to readers of this Blog. Here is a list of those: – Regulation and Responsibility of Credit Rating Agencies vis-a-vis the Current Economic Crisis- A Comparative Analysis – Rethinking the Linkages Between Foreign Direct Investment and Development: A Third...
Guidance on Due Diligence
M&A Law Prof Blog has a link to JeffreyWeiner’s Due Diligence in M&A Transactions: A Conceptual Framework which provides an overview of the due diligence process and its objectives in an M&A transaction. It will be a particularly useful reading for corporate lawyers who are starting out this season.
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