Tag: Securities Regulation
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Physical Settlement in Derivatives Trading
Over a decade ago, when trading in derivatives was commenced on Indian stock exchanges, it was decided that such instruments must be introduced in a phased manner. This was following the recommendations in the L.C. Gupta Committee report. Consequently, various types of derivatives were introduced at different points in time – index futures, futures in…
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Supreme Court on Takeover Regulations: Daiichi appeals allowed
A three-Judge bench of the Supreme Court has delivered its judgment (per Aftab Alam J.) in Daiichi Sankyo v. Chigurupati and Daiichi Sankyo v. Narayanan (Civil Appeal No. 7148/2009 and Civil Appeal No. 7314/2009, judgment dated 8 July, 2010); where the Supreme Court has in a common judgment allowed appeals against orders of the SAT…
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Extra-Territoriality of U.S. Securities Laws
Given the robust nature of the class action mechanism in the U.S., it is hardly surprising that plaintiffs rush to initiate legal actions before the U.S. courts even in relation to foreign companies that have issued securities listed on non-U.S. stock exchanges. U.S. courts have been left to combat with what are known as “foreign-cubed”…
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SEC’s Restrictions on Short Selling in Melting Scrip
(The following post has been contributed by Ravichandra S. Hegde of J. Sagar Associates) The Securities and Exchange Commission (“SEC”) in February 2010 has amended Rule 201 of the SHO Regulations[1] framed under the Securities Exchange Act of 1934 (“Act”) restricting abusive short sale in the falling scrip thereby retaining investor confidence. The amendment effected…
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SEBI Decisions on Public Offers and Derivatives
SEBI has made some regulatory pronouncements at its board meeting yesterday that concern public offerings of securities and the derivatives markets. As regards public offerings: (i) SEBI has decided that all investors in public offerings (including retail investors) “would be required to bring in 100% of the application money as margin along with the application…
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Do Auctions in Public Offerings Work?
The SEBI (Issue of Capital and Disclosure) Regulations, 2009 were recently amended to provide for “French” auction as one of the methods of price discovery in follow-on public offerings. This was supposedly brought about with a view to encourage the use of such auction mechanism in Government disinvestments. However, the results emanating from the first…
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Legal Issues in Stock Lending
We had earlier noted the recent relaxations introduced by SEBI in order to provide a thrust to the securities lending and borrowing (SLB) mechanism and thereby short selling of securities. Some doubts were expressed regarding the sustainability of even the reformed process. In a column in today’s Mint, Jayant Thakur highlights several legal issues that…
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Newer Pricing Options in Public Offerings
A couple of months ago, SEBI permitted companies undertaking follow-on public offerings (FPOs) to price their shares freely above a floor price and on the basis of the price the bidders have quoted. However, retail investors would be allotted shares at the floor price. This was also in preparation for a slew of offerings by…
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Another SEBI Order on Participatory Notes
About a month ago, we discussed SEBI’s order in the case of Barclays Bank in relation to the issue of participatory notes/ offshore derivative instruments (ODIs). Barclays had been prohibited from issuing, subscribing or otherwise transacting in any ODIs until reporting systems are put in place to the satisfaction of SEBI. Close on its heels…
