Tag: Securities Regulation
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Revised Primary Capital Market Norms
In the 17 years that SEBI has been in existence, the rules pertaining to issue and sale of capital to the public have undergone sea-change. This is not surprising as the nature and size of the Indian primary markets have witnessed significant growth in these years. The primary market norms (post the creation of SEBI)…
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Amendments to DIP Guidelines: Rights Issues and IDRs
SEBI today issued amendments to the SEBI (Disclosure and Investor Protection) Guidelines, 2000 with a view to simplifying the process for a rights issue. Since listed companies embarking on a rights issue are already subject to the disclosure norms under the listing agreement, substantial information regarding such companies are already available in the public domain,…
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Merits of a Financial Services Appellate Tribunal
(The following column by Somasekhar Sundaresan appeared in today’s Business Standard) Newspapers have recently reported that a proposal has been mooted in government to convert the Securities Appellate Tribunal (SAT) into a “Financial Services Appellate Tribunal” to hear grievances against orders passed by various sub-sectoral regulators. Currently, the SAT hears appeals only against orders passed…
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Shareholders and Their Duties under Indian Law
Under the Companies Act, 1956, shareholding in an Indian company is almost entirely associated with concepts like rights, entitlements and ownership. This emanates from Section 82, which reads as follows: The shares or debentures or other interest of any member in a company shall be movable property, transferable in the manner provided by the articles…
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SEC Issues Permanent Ban on Abusive Short Sales
In the aftermath of the financial crisis, the US Securities and Exchange Commission (SEC) had issued a temporary ban on the practice of “naked” short sales. By way of a recent press release, SEC has now made the ban permanent. The Press Release defines a “naked” short sale as one where “the investor sells shares…
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SEBI Notification Regarding Anchor Investors, etc.
RNI-1300 A couple of weeks ago, we had discussed some primary market reforms that were announced by SEBI. Most of those reforms have now been notified by SEBI by way of amendments to the SEBI (Disclosure and Investor Protection) Guidelines, 2000. The notification contains a fair amount of detail regarding anchor investors. Although such investors…
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SEBI’s Recent Primary Market Reforms
SEBI last week announced a slew of reforms to the primary capital markets. The key reforms are as follows: Anchor InvestorsThe concept of “anchor investors” has been introduced in public issues whereby 30% of the institutional (QIB) portion will be allocated to anchor investors on a discretionary basis. This is to ensure minimum commitments from…
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Prospects for Recovery of Capital Markets
Now that green shoots are visible in the Indian markets with some encouragement from the formation of the new Government, there is an expectation that capital markets are poised for recovery. There seems to be a steady flow of foreign capital into the Indian markets, and Indian companies too seem to be raising capital, albeit…
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Shareholder Activism and Class Action Lawsuits
Recent developments in the Indian corporate sphere – Satyam being the prime example – have raised several calls for instilling the culture of shareholder activism in India. One key form of such activism that keeps companies under check is the availability of class action lawsuits for securities law violations by companies, their promoters or managers.…
