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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...
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...
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...
Guest Post: Corporate Governance Disputes & Liability of Professionals and Non-Executive Directors
[The following is a guest post from Vinod Kothari of Vinod Kothari & Co. He can be contacted at [email protected]] The trail of litigation in Newcastle International Airport Limited vs. Eversheds LLP [2013] EWCA Civ 1514 , decided by the Court of Appeal on 28 November 2013, may be interesting for more than reason. One is quite obvious – a litigation that might have cost the plaintiff...
SEBI’s Proposal to Regulate Research Analysts
In a disclosure-based regime for securities regulation, research analysts have a significant role to play. When issuers and intermediaries are required to make extensive disclosures as mandated by law, it gives rise to the risk of “information overload”. The recipients of the information are unable to meaningfully decipher the impact of such information, particularly where the emphasis is on...
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