[Aditya Bhayal is a IV year student at NALSAR University of Law, Hyderabad] In this year’s Budget Presentation, the Finance Minister announced the introduction of the Social Stock Exchange (SSE) in the Indian capital market. Following this, the Securities and Exchange Board of India (SEBI) recently set up a panel to provide recommendations on the working and implementation of this concept. In...
Mergers or Demergers involving Listed Transferor Companies and Unlisted Transferee Companies
[Aishwarya Singh is a lawyer based in Mumbai. The views expressed in the article are personal.] This post discusses the regulatory framework relating to mergers or demergers involving a listed company and an unlisted company, wherein the whole or part of the undertaking, property or liabilities of a listed company, being the transferor company, are transferred to an unlisted company, i.e., the...
SAT Order: Stock Exchanges not to Follow SEBI’s Circulars and Directions Mechanically
[Anand Narayan is a corporate and securities lawyer currently working as an in-house counsel in Mumbai] One has lately witnessed a trend that the stock exchanges, such as NSE, BSE and NCDEX, are following the circulars and directions issued by the Securities and Exchange Board of India (SEBI) mechanically without application of mind, which has not gone down well with the market participants. Much...
Cross Listing of Shares: A Start
[Rahul Sinha is a consultant with EY] The Securities and Exchange Board of India (“SEBI”) constituted the ‘Expert Committee for listing of equity shares of companies incorporated in India on foreign stock exchanges and of companies incorporated outside India on Indian stock exchanges’ on 12 June 2018 with a view to facilitating companies incorporated in India to directly list their equity shares...
FAQs on Borrowing by Large Corporates: Unveiling the Perplexity
[Pammy Jaiswal is a Partner at Vinod Kothari and Company and can be reached at [email protected]] Background The untiring efforts of the Securities and Exchange Board of India (SEBI) as well as the Government in uplifting the bond market is quite commendable. SEBI has started taking major steps towards the accomplishment of the budget announcement by the Government for the year 2018-19...
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...
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