Tag: Securities Regulation
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SEBI Tightens Consent Order Norms
In 2007, SEBI issued a Circular containing guidelines for consent orders and composition of offences on matters involving violations of securities laws. This was also accompanied by a detailed set of FAQs. Since then, SEBI has issued several consent orders, including in some high profile cases. Due to criticism that the consent order mechanism was…
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SEBI Notifies Regulations on Alternative Investment Funds
Last year, SEBI had issued a concept paper on comprehensive regulation for alternative investment funds (AIFs). The proposal to set up a separate framework was approved by SEBI at its board meeting held last month. This proposal has now been operationalised by the promulgation of the SEBI (Alternative Investment Funds) Regulations, 2012, which were notified…
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Black Money: Corporate Entities and Securities Markets
The Government yesterday tabled its White Paper on Black Money in Parliament. Billed as the first document to comprehensively tackle the issue, it cites various studies and is replete with data. However, it has already been subjected to criticism from various quarters owing to the lack of details and clarity in solutions to deal with…
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The Changing Nature of Public Listed Companies
During the week that the Facebook IPO has captured the attention of market observers, the Economist has carried a couple of pieces (here and here) that raise questions regarding the interest and viability of public listed companies with diffused shareholding (epitomized by the Berle and Means corporation). The statistics shown by the Economist are quite…
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Securities Regulation Redux
Over the last decade, there has been a continuous tightening of securities regulation and corporate governance norms in the US following the various corporate governance scandals (Enron, WorldCom, etc.) and the global financial crisis. This has appeared in the form of legislation such as the Sarbanes-Oxley Act and the Dodd-Frank Act. More recently, however, there…
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Regulating Alternative Investment Funds
At its board meeting on April 2, 2012, SEBI has approved a proposal to frame a separate set of regulations governing alternative investment funds. This is with a view to regulate the fund industry more comprehensively. Currently, there are not only various routes available for investment funds to be structured, but there is ambiguity regarding…
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Institutional Placement Program
(The following post is contributed by Yogesh Chande, an advocate practising in Mumbai) The Institutional Placement Program (IPP) was approved by Securities and Exchange Board of India (SEBI) at its board meeting held on 3 January 2012. Subsequently, by a gazette notification dated 30 January 2012, the provision relating to IPP (Chapter VIII-A) was inserted in the SEBI (Issue…
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SEBI Regulates Algorithmic Trading
In order to keep up with advances in technology involving securities trading, SEBI has issued to the stock exchanges broad guidelines on algorithmic trading in the securities markets. The concept of algorithmic trading is defined as any “order that is generated using automated execution logic”. Such trading is effected by automated electronic platforms that analyze…
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Bombay HC in the MCX Case: Partial Reprieve to “Options” in Securities
Apart from dealing with specific issues relating to the facts of MCX’s application to commence the business of a stock exchange, the Bombay High Court’s judgment introduces greater clarity regarding the enforceability of options in securities of Indian public unlisted companies. The court was concerned with two issues pertaining to buyback and option arrangements that…
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Bombay HC in the MCX Case: Summary of the Judgment
The following is a summary of the various issues decided by the court, as extracted from the conclusions in the judgment itself: (i) Though the MIMPS Regulations in terms apply to a stock exchange in respect of which a Scheme for demutualisation and corporatisation has been approved under Section 4B, the application of those regulations…
