[Kevin Davis is a final year student at the West Bengal National University of Juridical Sciences] On 1 July 2024, the Securities and Exchange Board of India (SEBI) issued a circular, appropriately titled “True to Label”, which will alter the revenue structure and potentially dampen the rise of zero brokerage intermediaries in India. In brief, the impact of this circular is two-fold: first, it...
A Critical Analysis of SEBI’s Crackdown on Fantasy Trading
[Aamir Kapadia and Shivam Yadav are final-year BBA, LLB (Hons.) students at Jindal Global Law School] On 27 May 2024, the Securities and Exchange Board of India (“SEBI”) issued a circular, “Norms for Sharing of Real Time Price Data to Third Parties” (“the Circular”) to, inter alia, stock exchanges generally restricting them from sharing real-time market data with third-party entities (primarily...
Currency Derivatives Market in Transition: A Deep Dive into RBI’s Regulatory Intervention
[Palash Varyani is a 3rd-year B.A., LL.B. (Hons.) student at the Institute of Law, Nirma University, Ahmedabad] India’s currency derivatives market is undergoing a profound transformation following the Reserve Bank of India’s (RBI) recent directive, set to be enforced on May 3. Brokers are advising clients to square off rupee derivatives positions as the regulatory landscape undergoes a...
Beyond the Hype: Risks and Regulations in Binary Options Trading
[Shaswat Kashyap is a 3rd-year student at Gujarat National Law University and Snigdha Dash a 3rd-year student at National Law University, Odisha] A post late last year on Money Control highlighted a disquieting trend where certain financial influencers (finfluencers) are endorsing binary-trading platforms that the Reserve Bank of India (RBI) has blacklisted. Social media profiles with significant...
Revisiting the Ban on Futures Trading of Agri-Commodities in India
[Shuchi Agrawal is a research fellow in the Corporate Law and Financial Regulation team at Vidhi Centre for Legal Policy] On 27 October 2023, the Securities and Exchange Board of India (“SEBI”) extended the ban on futures trading in seven agricultural commodities for a year, that is, until 20 December 2024. Wheat, paddy (non-basmati), chana, mustard seeds, soya bean, crude palm oil and moong are...
Non-Fungible Tokens: An Indian Perspective
[Aiyushi Mehrotra is a 4th Year B.A., LLB. student at Gujarat National Law University, Gandhinagar] Non-fungible tokens (“NFTs”) are digital blockchain tokens that identify ownership or particulars of unique items, whether they be digital or real in form. They are traded and programmed in the same way as cryptocurrencies like Bitcoin or Ethereum, but that is where the similarities...
Why is Bilateral Netting Relevant?
[Lakshmi Babu is a corporate lawyer with an interest in financial regulation] The Central Government has recently notified the Bilateral Netting of Qualified Financial Contracts Act, 2020 (“Netting Act”), which intends to implement the process of bilateral netting among eligible financial parties. The Netting Act is effective from October 1, 2020. Netting, in essence, means the off-setting of all...
Rationalization of Participatory Notes: SEBI’s Regulatory Conundrum
[Tushar Oberoy and Rishabh Sharma are 4th Year, BA.LL.B. (Hons.) students at NALSAR University of Law, Hyderabad] In 2017, the Securities and Exchange Board of India (SEBI) had released a circular which practically rendered participatory notes (P-Notes) futile as an instrument for investment in India. The circular stated that foreign portfolio investors (FPIs) could not issue overseas derivative...
Arbitrating ISDA Disputes: A Bright Future for Derivative Markets
[Saurav Roy is a final-year law student [V B.A.LL.B] at ILS Law College, Pune] The International Swaps and Derivatives Association (“ISDA”) is the go-to trade organisation for participants in the over-the-counter (“OTC”) derivatives market. The ISDA Master Agreement (“Master Agreement”) is a standardised agreement which allows participants to enter into these derivative transactions. Although the...
The Introduction of Interest Rate Options In India
[The following guest post is contributed by Niharika Choudhary, who is a 4th year student at the National Law University, Jodhpur] Introduction Trade in financial derivatives has led to an enormous growth of the Indian financial system. New instruments have proliferated and trading volume has exploded. The use of financial derivatives has transformed the way financial institutions deal with risk...
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