TagSecurities Regulation

SEBI Informal Guidance on Receipt of Broking Income from Advisory Clients

[Rakshita Poddar is an Associate at Mindspright Legal in Mumbai] India’s financial advisory market has been developing at a rapid pace in the last decade and this required financial regulators like the Securities and Exchange Board of India (SEBI) to introduce a comprehensive and transparent set of laws for scrutinising the conduct of the market participants like investment advisers. Accordingly...

Social Stock Exchange in India: Scrutinizing the Vision

[Prachi Agrawal is a 4th year B.B.A., LL.B. (Business Law Hons.) student and Stuti Bhargava a 4th year B.A., LL.B (Business Law Hons.) student, both at the National Law University, Jodhpur] “It is time to take our capital markets closer to the masses and meet various social welfare objectives related to inclusive growth and financial inclusion.”– Nirmala Sitharaman In her budget speech in...

Andhra High Court Rejects Insider Trading Claims on Land

Rooted in preserving market integrity, the concept of insider trading emerged and has been ingrained in the context of the securities markets. Despite the well-understood nature of the subject-matter of insider trading, a question recently arose on whether the offence can be extended to the purchase and sale of land. In Chekka Guru Murali Mohan v. The State of Andhra Pradesh (decided 19 January...

Pump and Dump? SEBI Order against TV Anchor and Family

In a somewhat unconventional interim order, the Securities and Exchange Board of India (SEBI) issued a series of directions against CNBC Awaaz anchor Hemant Ghai, his wife Jaya Hemant Ghai and his mother Shyam Mohini Ghai. SEBI’s preliminary examination of prices of certain stocks indicated a pattern of trading that potentially violated the SEBI Act, 1992 and the SEBI (Prohibition of Fraudulent...

A Need to Revisit the SEBI (Intermediaries) Regulations, 2008

[Pallavi Mishra is a 5th year student at Hidayatullah National Law University] The Securities and Exchange Board of India (“SEBI”) notified the SEBI (Intermediaries) Regulations, 2008 were notified as an attempt to consolidate various laws governing the market intermediaries in India. These regulations lay down the common procedural compliances and adjudicatory mechanisms. They are enforced along...

SEBI Rules on Misapplication of IPO Funds

In an order issued yesterday involving Birla Pacific Medspa Limited (“BPML”), the Securities and Exchange Board of India (“SEBI”) was faced with an alleged misapplication of IPO funds by the company way back in 2011. Through a prospectus issued on June 29, 2011, the company raised Rs. 65.17 crores to establish “Evolve” Medspa centres across India, which constituted the primary purpose of the...

Regulating Listed PSUs for Disclosures and Transparency

[Gaurav Pingle  is a practising company secretary] True, fair, adequate and timely disclosures form one of the basic tenets of governance in listed companies and are essential for maintaining the integrity of the securities market. Timely disclosures of material events are of significant importance. They also bring about transparency and enable the investors to take an informed investment or...

The Use of Circumstantial Evidence in Securities Law Enforcement

[Shruti Rajan is a partner in the Financial Regulatory Practice at Trilegal. Vidhi Shah is an associate with the Financial Regulatory Practice at Trilegal.] Quasi-judicial authorities are not bound by strict rules of evidence. It is settled law that they are “entitled to act on material that may not be accepted as evidence in a court of law,” and examine all relevant information and data in...

SEBI’s New Pledge/Re-Pledge System Overhaul: An Appraisal

[Gayatri Puthran is a 3rd Year B.B.A., LL.B. student at the Jindal Global Law School] In a bid to promote ease of doing business, the Securities and Exchange Board of India (‘SEBI’) on 2 September 2020 by way of its circular titled ‘Disclosures on Margin obligations given by way of Pledge/ Re-Pledge in the Depository System’ (‘Disclosure Circular’) dispensed with certain disclosure...

Litigation against Credit Rating Agencies: Delhi High Court Delineates the Scope

[Kajal Singh and Nikunj Maheshwari are 4th year law students at the Institute of Law, Nirma University, Ahmedabad.] Credit rating is a mechanism to address the asymmetry of information in the debt investment market, where the independent credit rating agencies (‘CRA’) rate the debt instruments issued by the borrower company (‘client’). Clients, to get their instruments rated, enter into an...

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