[Prankul Boobana is a fourth year student at NALSAR University of Law, Hyderabad] With one of the bigger mutual fund houses winding up six of its debt schemes recently, the mutual fund (MF) industry, which was already facing liquidity issues, suffered a huge setback. In the past few months, the MF industry has witnessed various debt-laden companies defaulting and, resultantly, making delayed...
Research Reports: Converting UPSI into Public Information
[Ashlesha Mittal is an associate at Cyril Amarchand Mangaldas and a graduate of National Law University, Jodhpur] Five orders were released by the Assessing Officer of Securities and Exchange Board of India (SEBI) on April 22, 2020, April 13, 2020 and March 26, 2020 against Kotak Mahindra Life Insurance Company Limited, Aditya Birla Sun Life AMC Limited, SBI Funds Management Private Limited, IDFC...
SEBI’s Consultation Paper on Pricing of Preferential Issues and Open Offer Exemption
[Rongeet Poddar is a 5th Year student at West Bengal National University of Juridical Sciences] The Securities and Exchange Board of India (“SEBI”) on 22 April 2020 issued a consultation paper for easing pricing norms for preferential issues in companies having stressed assets. It aims to provide objective criteria for classifying a company as ‘stressed’. The document issued by the securities...
Yes Bank Case: Scope of ‘Encumbrance’ over Shares
[Arushi Gupta is a IV year student at National Law University Odisha] With the recent order of the Securities and Exchange Board of India (SEBI) imposing a fine on the promoter entities of YES Bank, the much contentious issue of the definition of encumbrance has again taken the centre stage. This post aims to analyse the recent order of SEBI in light of the SEBI (Substantial Acquisition of...
SEBI’s Proposed Framework for Corporate Bonds and Debenture Trustees
[Rashmi Birmole is a III year B.A., LL.B. student at ILS Law College, Pune] Infrastructure Leasing & Financial Services (“IL&FS”), a non-banking finance company (“NBFC”) belonging to a sub-category of systemically important non-deposit accepting core investment companies was, at the time, engaged in financing and developing infrastructure projects. In June 2018, the collapse of IL&FS...
Examining the Legal Nature of Commercial Papers: Securities or Money Market Instruments?
[Priyanka Sunjay is an associate at L&L Partners Law Offices. The author thanks Jay Parikh and Varun Kumar for their inputs] On 22 October 2019, the Securities Exchange Board of India (“SEBI”) issued a circular titled ‘Framework for Listing of Commercial Paper’ (“SEBI Circular”) in order to enable listing and trading of commercial papers on stock exchanges. This poses certain important...
Extraterritorial Compliance with Corporate Governance Norms
[Shubham Gupta is a 4th law student at Institute of Law, Nirma University, Ahmedabad] The Securities and Exchange Board of India (SEBI) has elucidated its position with the respect to the extra-territorial application of its corporate governance norms. In a recent informal guidance in the matter of KCP Limited, SEBI interpreted regulation 24(1) of the SEBI (Listing Obligations and Disclosure...
Liability of Issuers for Misleading Advertisement in a Public Issue of Securities
[Neha Sinha is a 3rd Year B.A. LL.B. student at National University of Study and Research in Law (NUSRL), Ranchi] In an order dated February 26, 2020, the Securities and Exchange Board of India (SEBI) imposed penalty on Muthootu Mini Financiers Ltd. (MMFL) in a matter relating to misleading advertisement made to the public at large regarding the issue of debt securities. The matter was decided by...
SEBI Introduces Greater Transparency in the AIF Space
[Vaneesa Agrawal is the founder and Rishi Ahuja an associate at Thinking Legal] The Securities and Exchange Board of India (“SEBI”) has, through a Circular dated February 5, 2020 (“Circular”), issued disclosure standards for the growing Alternative Investment Funds (“AIFs”) space. The Circular was preceded by a Consultation Paper dated December 4, 2019. SEBI has introduced performance...
SEBI’s Stewardship Code for Institutional Investors
[Pammy Jaiswal is a Partner at Vinod Kothari and Company] The activism of institutional investors was experienced for the very first time in Life Insurance Corporation v. Escorts Ltd., 1986 AIR 1370. While the Bombay High Court initially held that the role of the Life Insurance Corporation (LIC) is unconstitutional and mala fide, the Supreme Court allowed the LIC’s appeal and specifically stated...
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