Tag: SEBI
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Synchronised Trades Per Se Not Illegal
There is no prohibition on synchronised trading in securities, so long as the securities are delivered and that the transaction has not been effected with manipulative intent to artificially move the price of the stock. This position has been reiterated in a recent order of the Securities Appellate Tribunal (SAT) involving Subhkam Securities Private Limited.…
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Miscellaneous
1. Online Shareholder Participation In a previous post, we discussed the recent introduction of mandatory e-voting for large listed companies with effect from October 1, 2012. The Harvard Law School Corporate Governance Forum has a post that sets out some principles and best practices that companies are encouraged to adopt while conducting electronic shareholders meetings…
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Interpreting the Takeover Regulations
With the current Takeover Regulations (that came into effect in October 2011) being fairly recent, they are being subjected to interpretation during the course of their functioning. SEBI this week issued two sets of informal guidance in the context of one takeover. The first pertains to whether an acquirer holding less than 25% can make…
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Regulatory Updates: SEBI and CCI
SEBI: Stock Exchanges and Clearing Corporations SEBI has issued the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 that deal with the recognition, ownership and governance of stock exchanges and clearing corporations. Certain minimum ownership and net worth requirements have been specified. Maximum shareholding by a single shareholder has been limited to 5%…
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Insider Trading Enforcement
Rajat Gupta’s conviction by a New York court for insider trading has sparked off a debate about the state of insider trading enforcement in India. While several cases have been pursued by SEBI in the last two decades since insider trading has been prohibited by regulation, the rate of successful convictions or regulatory sanctions has…
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SEBI Tightens Consent Order Norms
In 2007, SEBI issued a Circular containing guidelines for consent orders and composition of offences on matters involving violations of securities laws. This was also accompanied by a detailed set of FAQs. Since then, SEBI has issued several consent orders, including in some high profile cases. Due to criticism that the consent order mechanism was…
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SEBI Notifies Regulations on Alternative Investment Funds
Last year, SEBI had issued a concept paper on comprehensive regulation for alternative investment funds (AIFs). The proposal to set up a separate framework was approved by SEBI at its board meeting held last month. This proposal has now been operationalised by the promulgation of the SEBI (Alternative Investment Funds) Regulations, 2012, which were notified…
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Impact of SEBI Order on Governance of Exchanges
The concept of demutualization of stock exchanges has given rise to some questions regarding the governance of demutualized exchanges. That concept requires exchanges to separate ownership and governance from that of its trading members. Some issues pertaining to demutualization have come up before SEBI in its investigation into the affairs of the United Stock Exchange…
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SEBI Reinforces the Sanctity of a Takeover Offer
In a recent order, SEBI refused permission for the withdrawal of a voluntary takeover offer by an acquirer. The details of the case involving an offer by Mr. Pramod Jain and Pranidhi Holdings Private Limited for shares in Golden Tobacco Limited are discussed at the Indian Legal Space Blog, as are reasons for SEBI’s decision.…
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Takeover Regulations: Pledge of Shares to Trustee Company
The SEBI Takeover Regulations (both the erstwhile regulations of 1997 and the present ones of 2011) carve out specific exemptions from disclosure and open offer requirements in case of pledge of shares in favour of banks or (public) financial institutions even if such pledge were to exceed the prescribed threshold shareholding percentages. Given the limited…
