TagSecurities Regulation

Front Running and Circumstantial Evidence (Matrimonial Websites Including)

Securities frauds such as insider trading and front running raise insurmountable hurdles for regulators because there is often no evidence, not even a smoking gun. Hence, regulators bear the burden of painstakingly piecing together several bits of circumstantial evidence that, as a whole, might be sufficient to convince a court or tribunal of the elements of a breach of the appropriate...

Amendments to the Portfolio Management Regulations: A Blessing for Retail Investors

[Aditya Bhayal is a 4th Year, B.A.LLB (Hons.) student at NALSAR University of Law, Hyderabad] On 20 November 2019, the Securities and Exchange Board of India (“SEBI”) introduced certain amendments to the SEBI (Portfolio Management) Regulations, 1993 (the “Regulations”). In doing so, SEBI considered the recommendations of a working group formed for suggesting changes, and comments received from...

SEBI’s Karvy Order: Tightening the Screws on Stock Brokers

Late on Friday, 22 November 2019, the Securities and Exchange Board of India passed an order in the case involving Karvy Stock Broking Limited (KSBL). The circumstances surrounding the order are atypical. The urgency of the situation is evident in the fact that the SEBI order, passed very late on 22 November, relies upon a “preliminary” report that it received from the National Stock Exchange of...

Disclosure of Loan Defaults by Listed Entities

Readers may recall the controversy surrounding a circular that the Securities and Exchange Board of India (SEBI) issued in August 2017 to all listed companies requiring them to make a public disclosure to the stock exchanges within one working day of defaulting on loans and other financial facilities. In a blog post then, I had discussed the rationale for SEBI’s move. However, the circular came...

SAT Rules on “Materiality” of Disclosures

A somewhat peculiar fact situation arose for consideration of the Securities Appellate Tribunal (SAT) in Electrosteels Limited v. Securities and Exchange Board of India (order dated 14 November 2019). Electrosteel Limited (ESL) embarked upon an initial public offering (IPO) in 2010. ESL’s parent is Electrosteel Castings Limited (ECL), a public listed company. Since iron ore is an essential raw...

Social Stock Exchange – A Breakthrough for the Impact Investing Sector

[Aditya Bhayal is a IV year student at NALSAR University of Law, Hyderabad] In this year’s Budget Presentation, the Finance Minister announced the introduction of the Social Stock Exchange (SSE) in the Indian capital market. Following this, the Securities and Exchange Board of India (SEBI) recently set up a panel to provide recommendations on the working and implementation of this concept. In...

Scope of Appeals against SEBI’s Disposal of Investor Complaints

The Securities and Exchange Board of India (SEBI) has established the “SEBI Complaints Redress System” (SCORES) for receiving investor complaints in respect of listed companies, collective investment schemes and other SEBI-regulated entities. The question of whether an appeal lies from SEBI’s disposal of an investor complaint through SCORES came up for consideration before the Securities...

Director Liability: Nexus with Role and not Position

[Pammy Jaiswal is a Partner at Vinod Kothari and Company, and can be reached at [email protected]] While there have been an increasing number of rulings on the liability of directors, the question that mostly came up for examination related to their involvement in the day-to-day operations of the company. The liability of non-executive directors has mostly been scanned to evaluate their...

Rationalization of Participatory Notes: SEBI’s Regulatory Conundrum

[Tushar Oberoy and Rishabh Sharma are 4th Year, BA.LL.B. (Hons.) students at NALSAR University of Law, Hyderabad] In 2017, the Securities and Exchange Board of India (SEBI) had released a circular which practically rendered participatory notes (P-Notes) futile as an instrument for investment in India. The circular stated that foreign portfolio investors (FPIs) could not issue overseas derivative...

Mergers or Demergers involving Listed Transferor Companies and Unlisted Transferee Companies

[Aishwarya Singh is a lawyer based in Mumbai. The views expressed in the article are personal.] This post discusses the regulatory framework relating to mergers or demergers involving a listed company and an unlisted company, wherein the whole or part of the undertaking, property or liabilities of a listed company, being the transferor company, are transferred to an unlisted company, i.e., the...

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