The Supreme Court of India earlier this month ruled on the applicability of the regulatory regime relating to collective investment schemes (“CIS”). In Securities and Exchange Board of India v. Gaurav Varshney, the legal question was rather straightforward. On 25 January 1995, section 12(1B) was inserted into the Securities and Exchange Board of India Act, 1992 (the “SEBI Act”). It provided that...
Bonus Debentures: A New Perspective on Certain Issues and Concerns
[The following post is contributed by Priya Garg, who is a student at the West Bengal National University of Juridical Sciences (WB-NUJS). An earlier post on this Blog discussing the features and implications of bonus debentures is available here.] Bonus debentures are those debentures which a company issues to its shareholders by using its reserves’ balance. Their issue does not require cash...
Paper on Crowdfunding
Arjya Majumdar and I have a paper titled “Regulating Equity Crowdfunding in India: Walking a Tightrope” that is available on SSRN. The abstract is as follows: Start-up companies face difficulties in raising finances, and the situation has exacerbated since the global financial crisis in 2008. As a result, crowdfunding has made its appearance as an attractive alternative capital-raising mechanism...
2nd GNLU Moot on Securities and Investment Law 2016
[The following announcement is posted on behalf of the Organising Committee of the GNLUMSIL] [Sep 09-11]: Register by July 20 (Revised schedule) ABOUT After successfully hosting the inaugural edition of the GNLU Moot on Securities and Investment Law (GNLUMSIL) in 2015, we would like to invite participation for the 2nd edition of GNLUMSIL, 2016. The moot is scheduled to be held from 9 – 11...
The Quest for Liquidity – Recent Measures to Curb Discretionary Restrictions on Redemptions of Mutual Fund Units
[The following guest post is contributed by Arka Saha, who is a 4th Year B.A.LL.B. (Hons) & Executive Student in CS (ICSI) at National Law University Odisha (NLU-O)] One of the key objectives of mutual fund investments, along with returns and security, is liquidity – the ability to liquidate holdings and withdraw investments in units as per the needs of the holder. Even closed-ended...
Recent Measures to Curb ODI Abuse – Do They Represent an Equilibrium Point?
[The following guest post is contributed by Arka Saha, who is a 4th Year B.A.LL.B. (Hons) & Executive Student in CS (ICSI) at National Law University Odisha (NLU-O)] Offshore Derivative Instruments (ODIs) such as Participatory Notes (P-Notes) and equity linked notes constitute a significant chunk of total investments by Foreign Portfolio Investors in India, thus posing an imminent threat...
SEBI’s Regime on Wilful Defaulters
Earlier this year, the Securities and Exchange Board of India (SEBI) had issued a discussion paper that proposed tight curbs against wilful defaulters from accessing the capital markets. We had commented on the discussion paper in previous posts (here and here). Pursuant to the consultation process, SEBI last week issued amendments to various regulations in order to operationalize such curbs...
The Need for a Dividend Disclosure Policy
[The following guest post is contributed by Soham Roy & Akhil Nene, who are 5th year students at the National Law University Odisha] In a recent Board meeting, SEBI provided an in-principle nod to mandating the top 500 listed companies in India (according to market capitalization) to disclose a dividend disclosure policy. Such a policy may include circumstances under which their shareholders...
Due Diligence in Corporate Transactions and Insider Trading Laws
In corporate transactions involving shares of listed companies, the ability to conduct a detailed due diligence is constrained by laws that regulate insider trading. In a paper titled “Due Diligence in Share Acquisitions: Navigating the Insider Trading Regime”, I seek to examine this issue in detail. The abstract of the paper is as follows: The goal of this paper is to unpack the underlying...
SEBI’s Inconsistent Orders on Similar Securities Law Violations
[The following guest post is contributed by Supreme Waskar, who is a corporate lawyer] By way of its order dated April 20, 2016 in the matter of M/s. Krishna Enterprises & M/s. Rajesh Services Centre (“Appellants”), the Securities Appellate Tribunal (SAT) observed that the Securities and Exchange Board of India (SEBI) is inconsistent in levying penalties for similar violations. The...
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