Blog Posts
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Substance over Form in Taxation: The Recent English Approach
We have at several times on this blog discussed issues around the legality of tax avoidance. In debates around avoidance/evasion distinction, reference is often made to the classic English cases – Duke of Westminster, Ramsay, Furniss, Macniven and others. In this background, it might be useful to consider the latest approach of the English Courts to…
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SEBI’s “Advisory Instructions” to BSE
In a somewhat unconventional order, SEBI has on April 20, 2010 issued “advisory instructions” in a matter involving the Bombay Stock Exchange Limited (“BSE”). It arises out of a letter by the BSE to SEBI dated July 2, 2004 containing a proposal to introduce a market making scheme in the derivatives segment of the exchange.…
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SEBI PLUGS LOOPHOLE IN BROAD-BASED CRITERIA FOR FIIs
The Securities and Exchange Board of India (“SEBI”) has issued a circular dated April 15, 2010 clarifying its stand on broad-based criteria for registration as foreign institutional investors (“FIIs”). See: http://www.sebi.gov.in/circulars/2010/cirimdfiic12010.pdf SEBI has clarified that if an entity has a feature of its structure, multiple classes of investors and multiple pools of investments within the…
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Characterising a Joint Venture
A joint venture, perhaps one of the most widely used vehicles of commerce, is principally of two types – an incorporated joint venture [“IJV”] and an unincorporated joint venture [“UJV”]. The shares of the IJV are held by the members of the joint venture, in proportions that typically reflect their respective contributions to the enterprise.…
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More Controversy over Forex Derivatives
Over the past two years, forex derivatives have generated substantial legal controversy in India, perhaps because of the relatively recent rise in the use of these instruments in India. We have discussed the challenge to the legality of derivatives as wagering agreements, their regulation, taxability and other related issues. The latest addition to this chapter…
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SEBI’s Order on ULIPs: A Misfired Shot? – Part II
(This is in continuation of Abhishek Tripathi’s previous post, and it examines the regulation of ULIPs in the backdrop of the reasoning adopted by courts in the Commonwealth) Insurance Act regulates companies engaged in any class of insurance business, and requires such companies to register themselves with the IRDA prior to commencing any insurance business.…
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SEBI’s Order on ULIPs: A Misfired Shot? – Part I
(The ULIP controversy has stirred an intense debate on the nature of instrument that it represents and consequently as to which regulator has purview over it. Jayant Thakur has previously analyzed the outcome of SEBI’s order in detail (here and here). Going by the developments following SEBI’s order, the legal issues surrounding ULIPs appear to…
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FDI Policy – Static or Dynamic?
Earlier this month, we had briefly discussed the Consolidated FDI Policy issued by the Government. The policy, which is meant to be exhaustive, would be subject to review every six months, with the first review due on September 30, 2010. The Business Standard has an incisive editorial about certain intervening events that already signal policy…
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SEBI suspends its ULIPs order – BUT ONLY PARTLY!
See my immediately preceding post on SEBI’s order prohibiting specified insurance companies essentially from (i) starting new ULIP schemes and raising monies thereon and (ii) accepting further monies from existing ULIP schemes (and of course from doing incidental acts like issuing offer documents, etc.). Readers, I am sure, are too well aware of the heated…
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SEC’s Restrictions on Short Selling in Melting Scrip
(The following post has been contributed by Ravichandra S. Hegde of J. Sagar Associates) The Securities and Exchange Commission (“SEC”) in February 2010 has amended Rule 201 of the SHO Regulations[1] framed under the Securities Exchange Act of 1934 (“Act”) restricting abusive short sale in the falling scrip thereby retaining investor confidence. The amendment effected…
