Tag: Securities Regulation
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SEBI’s Capital Market Reforms
In what is clearly the most extensive set of capital market reforms in recent years, SEBI announced a series of measures following its board meeting last week. These are intended to boost the capital markets in India (both primary and secondary), and also to streamline various process. The principal recommendations have been divided into the…
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High-Frequency Trading and Short Termism
The Economist has a piece that advocates a cautious approach towards high-frequency trading. It argues: This newspaper seldom finds itself on the side of restraining either technology or markets. But in this case there is a doubt whether the returns justify the risk. Society needs a stockmarket to allocate capital efficiently, rewarding the best companies…
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IPO Lock-in on ESOP Shares
SEBI recently issued an informal guidance to clarify that in the case of an IPO only shares held by employees of the company or other qualifying group entities (such as a holding company) are entitled to exemption from the one-year lock-in period on pre-existing share capital. Specifically, employees who are no longer in employment of…
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Synchronised Trades Per Se Not Illegal
There is no prohibition on synchronised trading in securities, so long as the securities are delivered and that the transaction has not been effected with manipulative intent to artificially move the price of the stock. This position has been reiterated in a recent order of the Securities Appellate Tribunal (SAT) involving Subhkam Securities Private Limited.…
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Miscellaneous
1. Online Shareholder Participation In a previous post, we discussed the recent introduction of mandatory e-voting for large listed companies with effect from October 1, 2012. The Harvard Law School Corporate Governance Forum has a post that sets out some principles and best practices that companies are encouraged to adopt while conducting electronic shareholders meetings…
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Insider Trading and “UPSI”: Another SAT Order
Apart from the evidentiary aspects of the insider trading, which are quite challenging (as discussed on this Blog and in this episode on CNBC), the substantive aspects of the violation are equally daunting for regulators as they require several prongs to be established. At the same time, it is sufficient for the alleged violator to…
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Regulatory Updates: SEBI and CCI
SEBI: Stock Exchanges and Clearing Corporations SEBI has issued the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 that deal with the recognition, ownership and governance of stock exchanges and clearing corporations. Certain minimum ownership and net worth requirements have been specified. Maximum shareholding by a single shareholder has been limited to 5%…
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Insider Trading Enforcement
Rajat Gupta’s conviction by a New York court for insider trading has sparked off a debate about the state of insider trading enforcement in India. While several cases have been pursued by SEBI in the last two decades since insider trading has been prohibited by regulation, the rate of successful convictions or regulatory sanctions has…
