As the regulator of India’s capital markets, the Securities and Exchange Board of India (“SEBI”) performs the role of a mini-state in that it exercises the powers of the legislature, executive, and judiciary, all vested in a single authority. Over the last three decades of its existence, SEBI has enacted regulations on nearly every single aspect of India’s capital markets. Its regulation-making...
Regulation vs. Reality: Is SEBI Pushing Category-II AIFs into Obsolescence?
[Khushi Patel and Kritika Jain are 3rd year BBA LLB (Hons.) students at Gujarat National Law University, Gandhinagar] Earlier this month, SEBI proposed amendments to regulation 17(a) of the SEBI (Alternative Investment Funds) Regulations, 2012 (the ‘AIF Regulations’), allowing category II alternative investment funds (AIFs) to meet their 50% unlisted investment requirement by including listed...
Redefining Oversight: SEBI’s Crackdown on ODIs and the Pursuit of Financial Transparency
[Kashvi is a second-year law student at National Law University Odisha and Divyansh is a third-year law student at National Law School of India University] Offshore derivative instruments (ODIs) have been a point of contention in India’s regulatory landscape for over 15 years. These instruments allow foreign investors to trade Indian securities without the need for registration with the...
Casting a Wider Net: SEBI’s Expanded Definition of “Connected Person” and “Relatives”
[Priyanshi Jain is a 5th year student at Institute of Law, Nirma University and Akhand Singh is a 3rd year student at Institute of Law, Nirma University] The Securities and Exchange Board of India [“SEBI”] on December 4, 2024 notified an amendment to the SEBI (Prohibition of Insider Trading) Regulation, 2015 [“PIT Regulations, 2015”] by way of the SEBI (Prohibition of Insider Trading) (Third...
Weighing SEBI’s Approaches to Diversify the Ownership of Clearing Corporations
[Vaibhav Gautam is a third year student at NALSAR University of Law, Hyderabad] Clearing corporations (“CCs”) are integral to the securities ecosystem, as they serve as central counterparties for the trades executed on exchanges. Their primary role involves guaranteeing the settlement of trade by managing risks and providing finality to the settlements. Their nature as risk managers comes along...
SEBI’s Move to Institutionalise Front Running in Mutual Funds
[Aryan Rawat is a 4th year B.A. LL.B. (Hons) student at National Law University, Odisha] On 5 August 2024, the Securities and Exchange Board of India (‘SEBI’) issued a circular to all asset management companies (‘AMCs’) and mutual funds (MFs), calling upon them to establish institutional mechanisms to curb front running and fraudulent securities transactions. This circular was issued at a time...
SEBI’s Finfluencer Legal Framework: Gaps in Enforcement and Investor Education
[Malini Mukherjee is a 5th year BBA LLB (Hons.) Student at Jindal Global Law School] On 27 June 2024, the Securities and Exchange Bureau of India (“SEBI”) convened its board meeting, where it approved norms to regulate financial influencers or ‘finfluencers’ (“the norms”). SEBI has defined finfluencers as individuals who provide advice on various financial topics and can influence the financial...
SEBI’s New Asset Class: Remodelling Mutual Funds into Hedge Fund Lites
[Parv Pancholi is a final year B.B.A. LL.B. (Hons.) student at National Law University Odisha, Cuttack] The Indian investment market continues to be an attractive hotspot for the domestic and foreign investors, offering a diverse range of financial products like mutual funds (“MFs”), alternative investment funds (“AIFs”), and portfolio management services (“PMSs”.) In recent years, a growing...
Aggressive for Passive: A Deep Dive into SEBI’s New MF Lite Regulations
[Yash Vardhan and Yuman Islam are 5th year students at Gujarat National Law University, Gandhinagar] The Securities and Exchange Board of India (“SEBI”) recently released a consultation paper introducing new regulations for passively managed mutual funds. The proposed regulations are called the “MF Lite Regulations.” This proposal aims to establish a more flexible regulatory framework for passive...
From Slabs to Simplicity: SEBI’s Regulatory Shift in Indian Brokerage
[Kevin Davis is a final year student at the West Bengal National University of Juridical Sciences] On 1 July 2024, the Securities and Exchange Board of India (SEBI) issued a circular, appropriately titled “True to Label”, which will alter the revenue structure and potentially dampen the rise of zero brokerage intermediaries in India. In brief, the impact of this circular is two-fold: first, it...
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