Tag: Options in Securities
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‘Marketable Securities’ and ‘Spot Delivery Contracts’: The Supreme Court’s Analysis of the SCRA
In its recent judgment in Bhagwati Developers v Peerless General Finance, the Supreme Court has considered some important questions relating to the interpretation of the Securities Contract (Regulation) Act, 1956 [“SCRA”]. There were principally two questions before the Court: (i) the applicability of the SCRA to public unlisted companies and (ii) the construction of a…
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Enforceability of Put and Call Options: Reality Soon?
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The Options Saga Continues
A few months ago, we had discussed a change of policy stance by the Government of India in allowing options (such as puts and calls) on shares of Indian companies to foreign investors. While the Government initially specified that the existence of such options would turn the foreign investment into an external commercial borrowing, it…
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Commencement of Disinvestment Process
Following the Finance Minister’s announcement in Budget 2009 to undertake disinvestments, the Government has now announced stake sales in 25 public sector companies through public offers. Its zeal to ensure the success of these public floats of shares is evidenced by a proposal to grant significant powers to the Department of Disinvestment. The truth, however,…
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Derivatives as speculative transactions
A recent post here discussed the decision of the ITAT Special Bench at Kolkata in Shree Capital Services v. ACIT, commenting on its relevance for derivative transactions in India. Another detailed examination of the decision, and of the legal issues surrounding the taxation of derivatives, is now available here. In sum, the author argues- “[a]…
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Enforceability of Options in Securities
The Mint carries an article by Archana Rajaram and Amrita Singh that discusses the current position on the enforceability of put and call options on securities of an Indian company. The Securities Contracts (Regulation) Act, 1956 (SCRA) and the notifications issued under that permit only ‘spot delivery’ contracts in securities transactions outside the exchange. A…
