Last year, we had discussed a decision of the Supreme Court which clarified that the Securities and Exchange Board of India (SEBI) had jurisdiction over the issuance of global depository receipts (GDRs), due to which lead managers to such issuances would also come within the purview of SEBI if their actions were found to violate Indian securities law. This involved PAN Asia Advisors Limited and...
Promoter Upside Sharing Arrangements in Listed Companies: SEBI Comes Down Hard
[The following post is contributed by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai. For another perspective on the topic, please see an earlier post on the Blog.] The Securities and Exchange Board of India (“SEBI“) has released a discussion paper (“Paper“) to regulate certain arrangements between private equity investors and the promoters/top...
SAT on Merchant Bankers’ Obligation in a Public Offering
Background: History Repeats Itself The Securities and Exchange Board of India (“SEBI”) has in recent year initiated actions pertaining to the alleged lack of accurate disclosures in prospectuses issued by companies in public offerings of securities. One high profile case involved the initial public offering (“IPO”) of DLF Limited wherein SEBI issued an order restraining DLF, its directors and CFO...
Exempted inter-se transfer amounts to ‘sale’
[The following post is contributed by Supreme Waskar, who is a corporate lawyer in Mumbai] In an earlier post on February 18, 2012, Mr. Umakanth Varottil had discussed the informal guidance issued by the Securities and Exchange Board of India (SEBI) to Strides Arcolabs in connection with the company’s eligibility to issue securities to its promoters on a preferential allotment basis...
SEBI’s Stance on Crowdfunding Platforms
On 30 August 2016, the Securities and Exchange Board of India (SEBI) issued a press release titled “SEBI Cautions Investors”. It covers various matters pertaining to the stock markets. One issue pertains to the question of leagues/ schemes/ competitions that may involve distribution of prize monies, which has been the subject matter of an earlier post on this Blog. Another aspect of SEBI’s...
A Tricky Game: The Legality of Fantasy Trading in India
[In this post, Sumit Agrawal, Partner and Surbhi Purohit, Associate from Suvan Law Advisors write about the increasing trend of stock market virtual games, apps and websites and how regulators may look at it. They can be reached at [email protected].] Background In recent times, the online stock trading apps and games have stirred up some controversy in the otherwise efficiently regulated realm...
Arbitrability of Securities Law in India
[The following guest post is contributed by Shreyangshi Gupta, who is a third year B.A., LL.B. student at the West Bengal National University of Juridical Sciences (WBNUJS). This post aims at identifying the nature of rights relating to securities law, i.e. if they are of such nature that they can be resolved by a private arbitral tribunal, or whether they are exclusively reserved for...
Liberalized Regime for Issuance of Masala Bonds
An attractive option for Indian companies raising finances is to issue rupee-denominated bonds to persons residing outside India. Popularly known as “masala bonds”, some of these may even be listed on foreign stock exchanges. Naturally, the legal regime governing these bonds, particularly from the purview of corporate law, securities regulation and foreign exchange laws is of relevance. Over a...
Discretionary Portfolio Management and Insider Trading
The concept of discretionary portfolio management (“DPM”) is one whereby a portfolio manager makes investments on behalf of a client. The decisions regarding which investments must be made, and on what terms, are left to the portfolio manager. The client neither influences the decision-making of the portfolio manager nor does the client get involved in day-to-day investment decisions. Request and...
SEBI’s Discussion Paper on Algorithmic Trading
Background to Algorithmic Trading Similar to most other fields, the use of technology is being optimized in trading in the stock markets. Stock trading is getting increasingly automated through use of sophisticated computer systems that operate through algorithms, which minimize human involvement and decision-making. Not only does this lead to the extensive use of technology by stock traders and...
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