[Aryan Rawat is a 4th year B.A. LL.B. (Hons) student at National Law University, Odisha] On 5 August 2024, the Securities and Exchange Board of India (‘SEBI’) issued a circular to all asset management companies (‘AMCs’) and mutual funds (MFs), calling upon them to establish institutional mechanisms to curb front running and fraudulent securities transactions. This circular was issued at a time...
SEBI’s New Asset Class: Remodelling Mutual Funds into Hedge Fund Lites
[Parv Pancholi is a final year B.B.A. LL.B. (Hons.) student at National Law University Odisha, Cuttack] The Indian investment market continues to be an attractive hotspot for the domestic and foreign investors, offering a diverse range of financial products like mutual funds (“MFs”), alternative investment funds (“AIFs”), and portfolio management services (“PMSs”.) In recent years, a growing...
Aggressive for Passive: A Deep Dive into SEBI’s New MF Lite Regulations
[Yash Vardhan and Yuman Islam are 5th year students at Gujarat National Law University, Gandhinagar] The Securities and Exchange Board of India (“SEBI”) recently released a consultation paper introducing new regulations for passively managed mutual funds. The proposed regulations are called the “MF Lite Regulations.” This proposal aims to establish a more flexible regulatory framework for passive...
SEBI’s Proposal for Indian Mutual Funds and Overseas Investments
[Adnan Danish and Zaier Ahmad are penultimate year BA LL.B. (Hons.) students at National Law Institute University, Bhopal ] The Securities and Exchange Board of India (SEBI) has recently issued a consultation paper that aims to address a regulatory gap. Currently, SEBI-registered mutual funds can invest in various overseas securities, including American Depository Receipts (ADRs), Global...
SEBI’s Sponsorship Shake-Up: Unravelling the Implications for Mutual Funds
[RS Sanjanaa is a third-year BA LLB (Hons.) student at Symbiosis Law School, Pune] A sponsor of a mutual fund refers to any bank, financial institution or a corporate who acts as the promoter of the mutual fund. The entity establishes the fund, obtains necessary approvals and funding, and incorporates an asset management company (“AMC”). On June 27, 2023, the Securities and Exchange Board of...
Extension of Insider Trading Regulations to Mutual Funds
[Ajitesh Arya is the 4th year BA LLB (Hons.) students at NALSAR University of Law, Hyderabad] Recently, the Securities Exchange Board of India (SEBI) floated a consultation paper proposing the expansion of the SEBI (Prohibition of Insider Trading) Regulations, 2015 [Insider Trading Regulations] to encompass mutual fund units. The move is interesting as it comes in the aftermath of a front...
Franklin Templeton: Supreme Court Rules on Unitholder Democracy
The winding up of six mutual fund schemes of Franklin Templeton has been mired in legal dispute. Last year, the Karnataka High Court ruled (discussed here) that the winding up of the schemes require the approval of the unitholders thereof. Upon appeal, the Supreme Court permitted the trustee of Franklin Templeton to call for a meeting of the unitholders under certain conditions prescribed by the...
A Review of “Investment Funds in India – A Legal Handbook”
[Ganesh Rao is a partner at Trilegal] Alok Verma and Karan Trehan’s Investment Funds in India – A Legal Handbook focuses on the legal regime governing investment funds in India and, in doing so, is probably one of the first books to be published in this field. The Securities and Exchange Board of India’s (“SEBI”) SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”) are...
Karnataka High Court Decision in the Franklin Templeton Case
The Karnataka High Court yesterday issued its 336-page ruling on the highly contested winding up of six schemes of the Franklin Templeton Mutual Fund (“FTMF”). FTMF’s decision was the subject matter of challenge before various High Courts, and the Supreme Court directed a transfer of all related petitions to the Karnataka High Court, which held a mammoth virtual hearing over several days before...
Asset Allocation for Multi-Cap Funds
[Divya Rau is a final-year law student at Jindal Global Law School] The Securities Exchange Board of India (“SEBI”) issued new guidelines regarding asset allocation by multi-cap funds on 11 September 2020 (“New Circular”). A multi-cap fund refers to “an open ended equity scheme investing across large-cap, mid-cap, small-cap stocks”. Large-caps refer to the top 100 firms by market capitalisation...
Recent Comments