[The following guest post is contributed by Kanwardeep Singh Kapany (5th B.S.L.LL.B) and Mitravinda Chunduru (4th B.S.L.LL.B.), both students of ILS Law College, Pune] INTRODUCTION The on-line trading system on the stock exchange is a blind trading system, which maintains complete anonymity of the persons trading on it. It does not permit the buyers and sellers to have any interaction between...
SEBI Discussion Paper on “Revising the Capital Raising Process”
There is a concern that issuers have resorted to private placements and qualified institutional placements (QIPs) to raise capital from specified investors rather than to public offerings of shares. This is due to the excessive burden and costs associated with a public offering of shares. Being cognizant of this tendency, SEBI has proposed measures to nudge issuers to move away from private...
Reverse Cross-Listings: Foreign Companies Accessing the Indian Capital Markets
Corporate and capital markets laws in India have allowed foreign companies to list in India in the form of Indian depository receipts (IDRs). While this facility was allowed with much fanfare, it has been accessed so far by only one company, i.e. Standard Chartered Bank. However, more companies might likely follow in the future. A new paper titled “Reverse Cross-Listings — The Coming Race...
Tighter Restrictions on Offshore Derivative Instruments
The issue of offshore derivative instruments (ODIs) such as participatory notes (PNs) have been the subject matter of regulatory controversy for some time now. These are instruments issued by foreign institutional investors (FIIs) (now foreign portfolio investors (FPIs)) to investors overseas that mimic the risks and rewards on underlying securities held by the FIIs/FPIs in Indian companies...
“Dual-class” Share Structures
The recent NYSE listing of Alibaba has once again brought to the fore the issue of dual-class share structures, as discussed in this column in the Economist. Alibaba’s founder and a group of insider shareholders have control rights that are disproportionate to their economic rights. The wave of dual-class structures in tech-IPOs was triggered by Google’s IPO in 2004, which was followed by another...
Guest Post: Comments on SEBI’s Crowdfunding Paper
[The following post is contributed by Debanshu Mukherjee, a Senior Resident Fellow at Vidhi Centre for Legal Policy, New Delhi] Last month, SEBI had issued a Consultation Paper on regulating Crowdfunding in India. Vidhi Centre for Legal Policy, a New Delhi based independent and not-for-profit think-tank prepared a detailed response to the Paper and submitted it to SEBI earlier this month...
Compensating Investor Losses in India
Posted on SSRN is a new working paper titled “The Protection of Minority Investors and the Compensation of Their Losses: A Case Study of India” that I have authored. The abstract is as follows: Any legal system may potentially deploy two separate but related models to ensure the accuracy of disclosure in the capital markets. First, it may possess legal institutions in the form of regulatory...
SEBI ICDR (Amendment) Regulations, 2014
[The following post is contributed by Shampita Das of Vinod Kothari & Co. She can be contacted at [email protected]] On 4 February 2014, SEBI issued a Notification amending the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (‘ICDR Regulations’) to make grading of an initial public offer (‘IPO’) by one or more credit rating agencies voluntary by companies. In...
Guest Post: Section 62 (1)(c) of Companies Act, 2013 and Liberty of Capital Raising by Companies
[The following is a guest post from Vinod Kothari of Vinod Kothari & Co. He can be contacted at [email protected]] Closer to the gradual implementation of the 2013 Act, one gets an ever firmer feeling that the drafting of the law became highly superficial, and the twin Parliamentary committees merely went on the basis of innate assurances that MCA would do what is required to resolve all...
Supreme Court on “Market Abuse”
In a judgment delivered last Friday, the Supreme Court came down heavily on “market abuse” not just on the case at hand but more generally on the practice to the extent prevalent in India. The case, N. Narayanan v. Adjudicating Officer, SEBI, arose in the form of an appeal from the Securities Appellate Tribunal (SAT) in relation to the appellant who was the whole time director of Pyramid Saimara...
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