SPECIAL VOLUME ON CAPITAL MARKETS & SECURITIES LAWS
Foreward | Patron's Message | Editorial Note | Advisory Board | Editorial Board
Sejal Trehan & Shashwat Sharma
Rajiv Gandhi National University of Law, Patiala
Market rumours wield the power to disrupt market stability by triggering rapid and often erratic fluctuations in securities of the company along with erosion of investor confidence. SEBI's response, the amended LODR Regulation 30(11), mandates prompt clarification of market rumours by top listed entities, aiming to overcome such challenges. However, this regulation hurdles timely verification, especially in sensitive situations like mergers and acquisitions governed by non-disclosure agreements. While designed to bolster investor confidence, the regulation's rigid 24-hour compliance window raises concerns of inadvertent market volatility. Drawing insights from global practice, this article critically assesses SEBI's initiative. It advocates for a nuanced approach, incorporating exemptions for ongoing negotiations, inspired by global best practices, while urging SEBI to reconsider the stringent timeframe. By melding global wisdom with domestic needs, a balanced regulatory framework can emerge, fortifying investor trust while navigating the complexities of market rumour verification.
Siddhu Sanghavi & Sameer Rahman
National Law University, Odisha.
The concept of sustainable business practices has evolved globally through the emergence of the Environmental, Social, and Governance (“ESG”) criteria aimed to benefit the institutions, those investing in such institutions, and society. The essay focuses on the evolution of the ESG from Corporate Social Responsibility (“CSR”) in India by way of disclosure regulation that enables companies’ transparency reporting. This essay examines the central role that SEBI has played in recent times, especially on the latest Business Responsibility and Sustainability Report (“BRSR”) norms. It emphasizes the need for standardized ESG rating providers and illustrates how India can shape its own unique ESG narrative drawing upon lessons from global experiences. It further highlights the multifaceted benefits of ESG reporting for both the investors and the companies, paving the way for a more sustainable and responsible business landscape.
Mahira Gupta
NALSAR University of Law, Hyderabad
Algorithmic trading is rapidly transforming global finance through automated, AI-driven systems that enable ultra-fast analysis and execution of trades. In India, algorithmic trading accounts for over 50% of equity transaction volumes and SEBI's regulations aim to harness benefits while minimising risks. Concerns remain around opaque marketing claims and lack of oversight for third-party algorithms marketed to retail investors. This analysis proposes two alternative regulatory approaches customised for India's maturing algorithmic landscape: (i) A voluntary industry Code of Conduct upholding ethical standards around transparency and investor protections without legalistic prohibitions that may constrain participation, and (ii) A specialised Regulatory Sandbox to rigorously stress-test retail algorithms through simulations before controlled launch, allowing vetted strategies to benefit from relaxed promotion norms unavailable normally. Together, these customised mechanisms encourage consultative governance and industry collaboration to balance stability and innovation in this disruptive domain critical to the technological advancement of India's capital markets.
Harsh Mittal & Anshupal Singh
National Law University, Odisha & National Law University, Jodhpur
This article delves into India’s cautious approach to regulating crypto-assets and explores the pivotal role that the Securities and Exchange Board of India (SEBI) could play in shaping a comprehensive regulatory framework. SEBI’s hesitancy arises from the inherent challenges posed by the decentralised nature of crypto-assets and the divergence between Indian legislation and global benchmarks. The article emphasises the operational intricacies of crypto-assets, including their anonymity and cross-border complexities, which complicate traditional regulatory approaches. Highlighting the potential legal vulnerabilities and global repercussions of inaction, the article argues for SEBI’s proactive intervention. Drawing on international examples, it discusses the evolving regulatory landscape in the European Union, the United States, and the United Kingdom, emphasising the need for SEBI to assume a leadership role in India’s crypto market regulation.
Aditya Hiremath & Ishwaryah Manikandan
Hidayatullah National Law University, Raipur
The mechanism of insider trading plans was introduced in India via the 2015 Prohibition on Insider Trading regulations as a means to allow corporate insiders the freedom to legitimately trade in company stock owned by them. The lack of popularity of this mechanism amongst insiders coupled with growing issues of insider trading violations have attracted the attention of the SEBI which has proposed an array of recommendations to restructure the mechanism to make it an attractive option to insiders. The authors of this blog provide an appraisal of the current mechanism of trading plans, followed by details on the shortcomings of the mechanism, a cross jurisdictional analysis of the use of trading plans, and finally suggestions to make trading plans a more attractive choice for insiders.