TagStock Exchanges

SEBI Circular on Minimum Public Shareholding

[Sarthak Karol is an associate at a law firm in Mumbai] By way of a Circular dated October 10, 2017, (“Circular”), the Securities and Exchange Board of India (“SEBI”) issued directions to stock exchanges to come down heavily on listed entities, their promoters and directors who are in breach of the 25% minimum public shareholding (“MPS”) norms mandated under regulation 38 of the SEBI (Listing...

SEBI’s Policy on Self-Trades

[Guest post by Jitesh Maheshwari, Associate at Mindspright Legal in Mumbai] Introduction Self-trades are trades executed on the stock market in which the same entity is both buyer and seller. These trades do not represent a real change in beneficial ownership of the security. Earlier, the position on self-trades was that they create artificial or fictitious volume in the market, and give a false...

SAT Order on “Shell” Companies

The issue of “shell” companies has captured the attention of the regulators over the last couple of years. There is a pervading sense of regulatory fear that, left unchecked, shell companies may be utilized for various illegal purposes, including money laundering. The Government has been taking steps at various levels to deal with what it visualizes as a menace of shell companies. One instance...

Listing of Stock Exchanges and Addressing Conflicts of Interests

A few years ago, we had discussed possible issues that arise out of the commercial operations of a stock exchange. While an exchange is a profit-making institution and is required to act in the interests of its shareholders, it also carries out a regulatory role in selecting companies that are to be listed on it and thereafter in overseeing their compliance with the listing requirements. These...

SEBI’s Discussion Paper on Algorithmic Trading

Background to Algorithmic Trading Similar to most other fields, the use of technology is being optimized in trading in the stock markets. Stock trading is getting increasingly automated through use of sophisticated computer systems that operate through algorithms, which minimize human involvement and decision-making. Not only does this lead to the extensive use of technology by stock traders and...

Whether Collection of Margin on Derivative Trades is Mandatory?

[This post is contributed by Prachi Pandya, founding proprietress of Corporate Attorneys and Vanessa Fernandes, an intern at Corporate Attorneys] Despite being termed as a weapon of mass destruction by Warren Buffet, derivatives are still an integral part of stock market trading. Whilst purchasing equity, one has to pay the entire value of the shares purchased within the settlement period of two...

A Rule of Reason for Self-Trades?

[The following guest post is contributed by Nikunj Agarwal, a 4th year student at RML National Law University, Lucknow and Arjun Agarwal, a 3rd year student at WB National University of Juridical Sciences, Kolkata. The authors can be contacted at nikunj.rmlnlu@gmail.com] Prefatory It is one of the well-known principles of...

SAT Order on “Flash Crash”

A few days ago, the Securities Appellate Tribunal (SAT) passed its order on an appeal by Emkay Global Financial Services Limited against the National Stock Exchange (NSE) and several investors in a case involving a “flash crash”. This case raises interesting legal and contractual issues, although they were substantially resolved through an interpretation of the bye laws and various circulars...

Madras High Court on SEBI Circular for Scheme of Arrangement

A few months ago, I had discussed SEBI’s circular of February 4, 2013, which imposes more stringent oversight by SEBI and the stock exchanges on different types of schemes of arrangement. Shortly thereafter, our guest contributor Yogesh Chande has pointed to issues relating to the scope of the SEBI circular, and specifically whether the circular applies only to such schemes that require exemption...

Scheme of Arrangement – Revised requirements for the stock exchanges and listed companies

[Yesterday, we had the opportunity to provide a brief analysis here on SEBI’s new circular on the topic. In the following post, Yogesh Chande points to some ambiguities regarding the scope of SEBI’s new circular. Yogesh is a Consultant, Economic Laws Practice, Advocates & Solicitors. Views expressed by the author are personal] This post pertains to the circular issued by Securities and...

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