Tag: Securities Regulation
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Preferential Allotment of Securities in Unlisted Companies
The Ministry of Corporate Affairs (MCA) has announced draft rules that will, when promulgated, substitute the Unlisted Public Companies (Preferential Allotment) Rules, 2003. This will make the process of issue of securities more stringent for unlisted public companies. The Indian Legal Space blog has a nice comparison of the existing rules and the proposed changes.…
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SEBI Reasserts Views on Put and Call Options
In view of the provisions of the Securities Contracts (Regulation) Act, 1956 (SCRA) and notifications issued thereunder, the validity of put and call options on securities of public limited companies entered into outside the stock exchange has been in doubt. In the last year, however, SEBI has been making its stand clearer: such options are…
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Restrictions on Redemption of IDRs
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Mutual Fund Scheme: Change in Fundamental Attributes
The Securities Appellate Tribunal (SAT) has ruled in a matter involving the HSBC Mutual Fund. In that case, HSBC had issued a scheme with two plans, viz. a long term plan and a short term plan. The relevant investors had invested in the short-term plan. However, HSBC wound up the long-term plan, and changed the…
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Offering of Securities: Public or Private?
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SEBI on Put and Call Options
The Vedanta/Cairn Energy deal brings the issue of put and call options back into the spotlight as SEBI has sought removal of those clauses from the agreement regarding sale of shares in Cairn India. Curiously enough, SEBI has adopted a strict stance on an issue that is far from being clear under Indian law. As…
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Allahabad High Court’s Order Vacating Stay in the Sahara Case
We have previously discussed SEBI’s order restraining two entities of the Sahara group as well as certain promoters and directors from accessing the capital markets. The order was subsequently stayed by the Allahabad High Court. On April 7, 2011, the Allahabad High Court vacated its stay, and this order is now accessible through eLegalix (Writ…
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Regulating use of Internet can stifle
SEBI’s move to regulate the usage of e-mail, internet and electronic means of communication by employees of market intermediaries, and to make the compliance officer liable, was commented upon recently by Umakanth here. However, well-intentioned, SEBI’s move is not implementable, poses serious issues for the office of the compliance officer, and can have the unintended…
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SEBI’s Call to Promote Market Transparency
In a circular issued this week, SEBI has advised market intermediaries to put in place a code of conduct and internal controls to prevent circulation of rumours and unverified information in blogs, chats and messenger sites. SEBI seeks to impose a check on circulation of such information, as “market rumours do considerable damage to the…
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Exclusion of Jurisdiction of Civil Courts under the SEBI Act
Legally India has made available certain expert witness statements filed before US Courts in the class action litigation concerning Satyam, which was recently settled. One of the witness statements, by Mr. Sandeep Parekh, makes an interesting point; but I am not entirely sure of the tenability in law of that point. Mr. Parekh’s declaration / statement…
