Blog Posts
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Some Lessons from Bear Stearns
[Posted by Umakanth Varottil] The New York Times DealProfessor has a column Burying Bear Stearns that highlights the takeaways from the Bear Stearns saga, which incidentally are matters we often endeavour to stress on this blog. They are: – Moral hazard– Systemic risk– Corporate governance
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SWFs as FIIs; Other Amendments to FII Regulations
[Posted by Umakanth Varottil] SEBI has announced a fairly detailed set of amendments to the SEBI (Foreign Institutional Investors) Regulations, 1995. One of the key amendments relates to the recognition of sovereign wealth funds (SWFs) as a category of investors eligible to invest into the Indian markets as FIIs. This marks a significant move because…
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External Commercial Borrowings Liberalised
[Posted by Umakanth Varottil] In August 2007, the Government tightened its policies on external commercial borrowings (ECBs). However, subsequently, in view of the changed economic scenario in the country, it has decided to liberalise its policies on ECBs. In a circular issued yesterday, the Reserve Bank of India (RBI) now allows borrowers in the infrastructure…
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A Progress Report on SEBI’s Recent Initiatives
[Posted by Umakanth Varottil] LiveMint carries a report analyzing SEBI’s progress under its new chairman, Mr. C. B. Bhave, who completes 100 days in office. While several initiatives have been taken in the primary and secondary markets, there seems to be a lot to be done as far as legal and investigation matters are concerned.…
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Enabling SMEs Access the Capital Markets
[Posted by Umakanth Varottil] Although the small and medium enterprises (SMEs) constitute a significant portion of India’s economy, they face several hurdles in accessing capital in a cost-effective manner. As far the capital markets are concerned, the SEBI (Disclosure and Investor Protection) Guidelines, 2000 provide several eligibility criteria for companies to qualify for being able…
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Participatory Notes and Disclosure Requirements
[Posted by Umakanth Varottil] In an earlier post, we had discussed the decision of the Securities Appellate Tribunal (SAT) setting aside a SEBI order that imposed a penalty of Rs. 1 crore on an FII for giving a false declaration regarding its issuance of participatory notes. Our guest contributor, Somasekhar Sundaresan, has written a column…
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Financial Disclosures by Companies
[Posted by Umakanth Varottil] A column by Rahul Roy in The Business Standard deals with the proposed revision and simplification of Schedule VI to the Companies Act. This schedule prescribes the presentation and disclosure requirements for financial statements. The column strenuously argues that the current version of Schedule VI is severely outdated and as to…
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Foreign Currency Borrowings: FCEBs and ECB
[Posted by Umakanth Varottil] In an earlier post, we had analysed the notification of the Government of India permitting the issuance of Foreign Currency Exchangeable Bonds (FCEBs). The Reserve Bank of India (RBI) was expected to prescribe detailed guidelines on the mechanism for the issuance of FCEBs. It is now reported in LiveMint that the…
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Bharti-MTN: Structural Problems
[Posted by Umakanth Varottil] The proposed deal between Bharti and MTN to combine their businesses fell through over the weekend. Although the principal reason for the fallout appears to be disagreement over who would control the combined entity, that was aided by problems with structuring the deal from a regulatory perspective. As The Economic Times…
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A Possible IDR Debut in the Indian Markets
[Posted by Umakanth Varottil] A few months ago, we had lamented about the lack of even a single issuance of IDRs by foreign companies in the Indian markets; this, despite the relaxation of rules in 2007 to facilitate IDR listings. We had said: “Indian Depository Receipts (IDRs) are instruments that enable foreign companies to access…