[The following guest post is contributed by Amitabh Robin Singh, who is an Associate at DSK Legal] The recently released Companies Law Committee report (“Report”) has recommended a plethora of amendments to the current company law regime. However, some of the most sweeping changes have been proposed in relation to private placement of securities. In this post, some of the key changes...
Update: Proposed Amendments to the AIF Regulations
[The following post is contributed by Bhushan Shah and Labdhi Shah from Mansukhlal Hiralal & Company] Alternative Investment Funds (AIF(s)) play a vital role in Indian economy as they drive economic growth and contribute significantly to nation building. To regulate AIFs under one single regime, the Securities and Exchange Board of India (SEBI) in 2012 notified SEBI (Alternative...
Exit Route For Companies Who Have Made Deemed Public Issues
[The following guest post is contributed by Amitabh Robin Singh, who is an Associate at DSK Legal] The Securities and Exchange Board of India (“SEBI”) has recently issued a circular (“Circular”) which has allowed companies which have made deemed public offers (allotment of securities to more than 49 persons under the Companies Act, 1956) to escape penal action if the securities have not been...
SEBI: Report on Alternative Investment Funds
Yesterday, the Alternative Investment Policy Advisory Committee appointed by SEBI under the chairmanship of Mr. Narayana Murtyh issued its first report. The Committee has suggested a number of reforms on different fronts, including creating a favourable tax environment for investors, unlocking domestic sources of venture capital and private equity, enabling and encouraging onshore fund management...
India Plans to Tap into Green Bonds
[The following guest post is contributed by Arundhuthi Bose, who is an Executive at Vinod Kothari & Co.] Introduction Issuing bonds to raise funds from investors is not a novel concept. A bond, in common parlance, is an instrument evidencing indebtedness of the bond issuer to the bondholders. Here, a debt instrument is issued by the issuer to the investor, under which the issuer...
Presumption in Insider Trading
Given the evidentiary problems in insider trading cases, SEBI has resorted to the use of presumptions in its enforcement of the SEBI (Prohibition of Insider Trading) Regulations, 1992. Some of the issues that arose due to this approach have been discussed in the past. These issues have resurfaced more recently in a short order of the Securities Appellate Tribunal (SAT) in the case of Reliance...
Whether Collection of Margin on Derivative Trades is Mandatory?
[This post is contributed by Prachi Pandya, founding proprietress of Corporate Attorneys and Vanessa Fernandes, an intern at Corporate Attorneys] Despite being termed as a weapon of mass destruction by Warren Buffet, derivatives are still an integral part of stock market trading. Whilst purchasing equity, one has to pay the entire value of the shares purchased within the settlement period of two...
SEBI Adjudication Order: Disclosure of Encumbrances Over Shares
The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the “SAST Regulations”) contains provisions in Reg. 31 that requires promoters of a company to disclose to the company and the stock exchanges the details of shares encumbered by them and also any invocation or release of encumbrance. The genesis of the requirement to disclose pledge and other encumbrances arose after...
A Rule of Reason for Self-Trades?
[The following guest post is contributed by Nikunj Agarwal, a 4th year student at RML National Law University, Lucknow and Arjun Agarwal, a 3rd year student at WB National University of Juridical Sciences, Kolkata. The authors can be contacted at [email protected]] Prefatory It is one of the well-known principles of securities regulation that the primary objective of such regulation is to...
Enhanced Disclosure Requirements for Listed Companies
SEBI this week issued a series of circulars pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), which seek to streamline and enhance the disclosure obligations of listed companies. The three different circulars are briefly discussed below. Shareholder Voting Results In the case of shareholders’ meetings, SEBI has prescribed that a...
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