Background Earlier this week, SEBI issued the Securities and Exchange Board of India (Listing of Specified Securities on Institutional Trading Platform) Regulations, 2013 (the Regulations), which enables small and medium enterprises (SMEs) to list on the stock exchanges without going through an initial public offering (IPO). This represents another step in creating special avenues for SMEs to...
Analysis of SEBI Notification on Pre-emption Rights and Options – Part 2
[This is a continuation of a previous post on the topic. It has been contributed by Ms. Sikha Bansal of Vinod Kothari & Company, who can be reached at [email protected]] 4. Legality of option contracts Option contracts conferring exit opportunities to investors are, in commercial practice, important in view of the growth of funding...
Analysis of SEBI Notification on Pre-emption Rights and Options – Part 1
[Last week, we had discussed SEBI’s recent notification granting conditional validity to pre-emption rights and options in securities of Indian companies. In the following two-part post, Ms. Sikha Bansal of Vinod Kothari & Company provides a detailed background to SEBI’s recent reforms and analyses their impact. She can be reached at [email protected]] In our elaborative article...
Unlisted Companies: Raising Capital Abroad
In the late 1990s, it was possible for Indian unlisted companies to raise capital overseas and list on overseas stock exchanges without having a primary listing in India. Companies such as Rediff and Sify had taken advantage of this mechanism and listed on the US stock exchanges. However, a few years ago, this route was effectively blocked when the Government of India stipulated that a primary...
SEBI introduces ‘Angel Funds’
[The following post is contributed by CS Vinita Nair – [email protected] & Pooja Rawal – [email protected] from Vinod Kothari & Company, Practising Company Secretaries] “Angel investors bring both experience and capital to new ventures. SEBI will prescribe requirements for angel investor pools by which they can be recognised as Category I AIF venture capital funds”...
SEBI Notification on Pre-Emption Rights, Put and Call Options
The enforceability of pre-emption rights and put and call options in securities of Indian companies has been fraught with difficulties for a number of years. These have been discussed in detail in this paper, with arguments made for streamlining these provisions to recognise such rights and options in investment agreements. Although the Securities and Exchange Board of India (SEBI) had been...
Amendments to SEBI’s FUTP Regulations Effective
In previous posts (here, here and here), we had discussed issues that had arisen under the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to the Securities Market) Regulations, 2003 (the FUTP Regulations), particularly in the context of front running. We had also discussed SEBI’s proposal to amend the FUTP Regulations to expand the scope of front running and also to bring in...
Update on Delisting of Fresenius Kabi Oncology Limited
[The following post is contributed by Yogesh Chande, who is a Consultant with Economic Laws Practice, Advocates & Solicitors. Views of the author are personal] On 22 July 2013, the SEBI whole time member passed an order in relation to the proposed voluntary delisting of Fresenius Kabi Oncology Limited (Target Company) by its promoters in accordance with the SEBI (Delisting of Equity Shares)...
No More Front Running Through The Back Door
[This post is contributed by Anjali R. Menon, who is a Senior Associate at a leading law firm in Mumbai. She also runs a blog at . She can be reached at [email protected]. It relates to the issue of front running, which has been previously discussed on this Blog in the context of cases decided by the Securities Appellate Tribunal (SAT) and the Securities and Exchange Board of India (SEBI)...
Regime on Fraudulent Trade Practices Strengthened
We had earlier discussed two decisions of the Securities Appellate Tribunal (SAT) (here and here) and also an order of SEBI (here) on whether the front-running activities of persons other than “intermediaries” can be brought within the purview of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 (the PFUTP Regulations). While the SAT...
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