TagSecurities Regulation

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...

SEBI Committee on Regulating Proxy Advisors

Over the last decade, India has witnessed considerable shareholder activism in that shareholders, particularly institutions, have become more active in exercising their corporate franchise. Proxy advisory firms have formed an integral part of this movement, as they provide advice to both institutional and individual shareholders on how they may exercise votes at shareholder meetings of companies...

The Effect of an Increased Free Float on India’s Promoter-Controlled Companies

[Shiluti Walling is a 4th year B.A., LL.B. (Business Law Hons.) student at National Law University, Jodhpur] The Union Finance Minister recently proposed the increase of the minimum public shareholding (MPS or free float) from 25% to 35%. Prior to the proposal, public shareholders of a listed company were required to hold at least 25% of the paid-up capital of the company as free float, pursuant...

SEBI’s DVRs Framework: How Will the Indian Market React to a Super Voting Stock Structure?

[Sarthak Sharma and Aabha Dixit are 3rd year and 4th year students respectively at Hidayatullah National Law University, Raipur] The Securities and Exchange Board of India (SEBI) on 27 June 2019, after much deliberation, approved the issuance of shares with differential voting rights (DVRs) and issued a framework governing issuance and listing of shares with DVRs. Prior to this, whilst issuance...

SAT Order: Stock Exchanges not to Follow SEBI’s Circulars and Directions Mechanically

[Anand Narayan is a corporate and securities lawyer currently working as an in-house counsel in Mumbai] One has lately witnessed a trend that the stock exchanges, such as NSE, BSE and NCDEX, are following the circulars and directions issued by the Securities and Exchange Board of India (SEBI) mechanically without application of mind, which has not gone down well with the market participants. Much...

Position of Accredited Investors in India within SEBI’s Framework

[Shreshtha Mathur and Chahak Agarwal are fourth year law students at National Law University, Jodhpur] The Securities and Exchange Board of India (SEBI) on 22 May 2019 released the “Framework for the process of accreditation of investors for the purpose of Innovators Growth Platform”. It seeks to provide a boost to entities seeking to get listed on the Innovators Growth Platform (IGP), the stock...

Insider Trading: Will the Informant Mechanism be Effective?

[Sakshi Ajmera is a 2nd year B.A.LL.B. (Hons.) student at the National Law Institute University, Bhopal] The Securities and Exchange Board of India (SEBI) on 10 June 2019 proposed an ‘informant mechanism’ to safeguard the interests of the investors and limit insider trading. In light of the difficulty in tracking illegal transactions, SEBI has released a discussion paper, which could be...

SEBI’s Framework for Innovation Sandbox – Infusing FinTech into India’s Securities Markets

[Mansi Mishra is a 2nd year B.A.LL.B. (Hons) student at National Law Institute University, Bhopal] The Securities and Exchange Board of India (SEBI), amidst much speculation in the securities market, proposed the “Framework for Innovation Sandbox” by way of its circular dated 20 May 2019. This post seeks to analyse the key proposals of the SEBI framework and to highlight the takeaways for the...

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