[Srishti Multani and Aryan Birewar are 4th year BBA LLB (Hons.) students at Symbiosis Law School, Pune] On 27 March 2024, the Reserve Bank of India (‘RBI’) released a notification (‘Revised Notification’) relaxing certain directions given to regulated entities (‘RE’) in the notification (‘Previous Notification’) dated 19 December 2023 after due consultation with the stakeholders and industry...
Demystifying Overlap in Collective Investment Schemes and Joint Ownership Structures
[Mihir Vashishtha is a final year B.A., LL.B. (Hons.) student at National University of Study and Research in Law, Ranchi] With the rise of digitization in the capital market, there has been a notable surge in interaction between retail investors and the market, leading to increased investment activity. In turn, this increased digitization has incentivized market players to develop investment...
Venture Capital’s Tryst with Tax: Revisiting the Debate on Carry
[Bhaskar Vishwajeet and Abhinav Shankarraman are final year law students at Jindal Global Law School] The Karnataka High Court recently overruled a Customs, Excise, Service Tax Appellate Tribunal (“CESTAT”) order (page 4) on the service tax status of venture capital trusts (“VCTs”), declaring that service tax is not applicable to VCTs as they are pass-through structures. The authors argue that...
Disclosure Dilemma: Streamlining Disclosures for Smoother FPI Flow
[Isha Sharma is a 4th year B.A., LL.B. (Hons.) student from Gujarat National Law University, Gandhinagar] The Securities and Exchange Board of India (“SEBI”), as the primary authority overseeing the Indian securities market, regularly reviews and updates regulatory frameworks to harmonize the evolving market dynamics with the best global practices. In 2023, SEBI introduced significant amendments...
Personal Data Breach Notifications as UPSI(?): A Safe Haven for Insider Trading
[Fathima Rena Abdulla is a 3rd-year B.A., LL.B. (Hons.) student at NUALS, Kochi] Stock market responses to cybersecurity breaches have consistently triggered negative outcomes and, consequently, opportunistic insider trading. Through timely selling before public breach announcements, insiders employ various tactics, including buying put options, making profits, or avoiding losses from the...
Navigating the Regulatory Maze: The Imperative for Harmonized Decision-Making in SEBI
[Philip Oommen is a lawyer based in Mumbai, and a graduate of the National Institute of Securities Markets] The regulatory landscape of the Indian securities market currently exhibits a noticeable lack of uniformity, as demonstrated by the divergence in decisions rendered by the Securities and Exchange Board of India (“SEBI”). This divergence in decision-making underscores the inherent...
Revolutionizing Trade Settlement: SEBI’s Progressive Push for T+0 and Instant Settlement
[Smruti Kulkarni and Manas Rohilla are 3rd year students at Gujarat National Law University, Gandhinagar] On 22 December 2023, the Securities and Exchange Board of India (SEBI) issued a consultation paper on “Introduction of optional T+0 and optional Instant Settlement of Trades in addition to T+1 Settlement Cycle in Indian Securities Markets”. The paper analyses feasibility and desirability of...
Navigating Vulnerabilities: SEBI’s Circular on Trading Account Security
[Snigdha Dash is a 3rd year B.A.LL.B.(Hons.) student from National Law University, Odisha] The market’s abundance of traders, providers, platforms, brokers, and communication channels has created an environment susceptible to potentially malevolent activities. Exploiting vulnerabilities to gain unauthorized access to trading accounts and execute illicit transactions, such as in currency trading...
Navigating the Maze: Scrutinising SEBI’s Framework for Short Selling
[Garv Arora and Vatsal Jain are 3rd year B.A., LL.B. (Hons.) student at HNLU, Raipur] By way of its circular titled ‘Framework for Short Selling’ dated January 5, 2024 (the ‘Circular’), the Securities and Exchange Board of India (‘SEBI’) has laid down a definitive framework to better regulate short-selling transactions in the Indian stock market. Short selling is a trading activity that focuses...
Empowering Investors: SEBI’s Game-Changing Circular on Trading Account Control
[Nikita Singh and Aishana are the third year law students at Gujarat National Law University.] The Indian stock broking industry is undergoing a major change with the introduction of a new facility for investors to voluntarily freeze or block their online access to their trading accounts. This facility, which was introduced by the Securities Exchange Board of India (SEBI) on 12 January 2024...
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