Tag: Securities Regulation
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Offering of Debentures: SEBI’s Order in the Sahara Case
Earlier this week, SEBI issued an order restraining two entities of the Sahara group as well as certain promoters and directors from accessing the capital markets. While Sahara Prime City Limited had filed its draft red herring prospectus (DRHP) with SEBI in connection with its proposed IPO, SEBI received complaints that its group companies Sahara…
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Disclosure as an Instrument of Securities Regulation
The almost universally accepted strategy for securities regulation is to require issuers to make adequate disclosures in offering documents. The role of the regulators is to determine the extent of disclosures required. It is then left to investors to rely upon the disclosures and to make a decision as to whether to invest or not.…
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Changes to Capital Markets Regulations
On October 25, 2010, SEBI announced a number of changes to regulations governing capital markets. 1. Public offerings. A new regime is being established for IPOs by insurance companies. Rather than issue a new set of guidelines for that industry, SEBI has decided to apply the ICDR Regulations, 2009 along with additional industry-specific disclosures such…
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Disclosures on Management Changes
The saga involving the removal of SKS Microfinance’s chief executive raises a number of issues relating to corporate governance as well as securities regulation. One such issue pertains to the nature of public disclosures made regarding the removal of the chief executive, which acquires prominence considering SKS is a public listed company. Circumstances that have…
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SEBI Order on MCX Stock Exchange
SEBI yesterday issued a detailed order rejecting the application of MCX-SX to commence trading in several exchange segments. The background of the case and the gist of SEBI’s order are available at Business Standard and Livemint. SEBI’s conclusion is based on a legal analysis (a fairly intensive one for a regulator) of various issues as…
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Barclays Order: ODI Restrictions Lifted by SEBI
In December 2009, we had discussed SEBI’s order whereby Barclays was found to have failed in complying with certain disclosure norms while issuing offshore derivative instruments (ODIs) under the SEBI (Foreign Institutional Investors) Regulations, 1995. For this, SEBI had prohibited Barclays from issuing, subscribing or otherwise transacting in any ODIs until reporting systems are put…
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Participatory Notes Fall in Popularity
After initially cracking down in 2007 on indirect investment routes such as those using participatory notes (P-notes), SEBI a year later reversed its decision and allowed foreign investors to participate in the Indian markets through P-notes. SEBI’s decision to allow P-notes was the subject-matter of critique on this Blog as it raises questions regarding transparency.…
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Extending Securities Regulation to the Fourth Estate
A free and active press generally provides impetus for instilling enhanced corporate governance practices in any economy, as it does in India. However, conflicts of interest that the media faces may create distorted incentives that dilute these objectives. One such conflict is presented by the concept of “private treaties” whereby media enterprises take stakes in…
