Showing posts from January, 2013

SEBI Issues Investment Advisers Regulations, 2013

SEBI through a notification dated 21st January 2013 has notified a new set of regulations by the name of Securities and Exchange Board of India (Investment Advisers) Regulations, 2013, which as the name suggests, aim to register and regulate the working of Investment Advisers and such other intermediaries associated with the securities market. These regulations shall come to force on the 90th day from the date of their publication in the Official Gazette.

These regulations have come after SEBI released a concept paper in 2011 where the regulator intended to address the issue of conflict of interest in the financial markets arising between the manufacturers of financial products on one hand and on the other hand, the distributors, agents, financial advisers, etc., who sell these products to the investors. This came in the wake of the Regulator's taking note of the key role played by these advisers/intermediaries because not only are the intangible financial products conceptually d…

RBI Updates : Foreign Exchange Management Act 1999

Reporting under Foreign Exchange Management Act, 1999 (FEMA) Today, a huge number of Indian entities are engaged in various transactions relating to foreign exchange which are governed by FEMA, 1999. Foreign Exchange Management Act, 1999 and the various regulations issued by the Reserve Bank of India stipulate various reporting requirements on the companies engaged in foreign exchange transactions. Every company engaged in the activity involving foreign exchange is required to do the reporting compliances within the stipulated time period. Penal provisions are applicable on the company for every late or Non-filing of returns by the Company.

TakeoverCode ZOOM LENS: M/s Khaitan Electricals Limited

On March 12, 2007, Mr. Sunil Khaitan, Mr. Krishna Khaitan, M/s Khaitan Lefin Limited (KLL) and M/s Orientale Mercantile Company Limited (OMCL) (Noticees) acquired 13,00,000 equity shares pursuant to conversion of warrants in M/s Khaitan Electricals Limited (Target Company) that has triggered Regulations 10 and 11(1) of SEBI (SAST) Regulations, 2011 requiring open offer to the shareholders of the Target Company. However, the Noticees failed to do so and accordingly, SEBI directed the Noticees to make a combined public announcement under regulation 10 and 11(1) of the SEBI (SAST) Regulations, 1997 and also to pay interest at the rate of 10% per annum.

Restriction on ESOP Trusts for Secondary Market Purchases

SEBI, vide its Circular dated January 17th 2013 has come out with an amendment to the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and a consequent amendment to the Equity Listing Agreement as well.

Ms. Anjali Aggrawal
Vice President
+919971673336 SEBI through SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 provides an orderly framework for the listed companies to reward their employees through stock option schemes and stock purchase schemes. These regulations contain detailed provisions, with regard to any ESOP/ ESPS scheme of a listed entity. Whereas it was observed by SEBI that some listed entities, while framing their ESOP Schemes had created the Trusts to deal in their own securities in the secondary market, which was not envisaged within the purview of SEBI (ESOS and ESPS) Guidelines 1999. Thus, it has been decided to prohibit the listed entities from framing any employee benefit s…

Class Action Suits under New Company Law

A class action or a class suit is a lawsuit that allows a large number of people with a common interest in a matter to sue or be sued as a group. The concept that is common in developed countries such as the US, UK and Singapore did not exist in India. The provision of class suit gives stakeholders an edge in retrenching their rights.
Bringing together people with common interest on a common platform increases the efficiency of the legal process and lowers the costs of litigation.
Aggregating large number of complaints together makes cost and effort involved in a legal process worthwhile as amounts to be recovered by each aggrieved individual may be too small to justify solo action.

The threat of class action tends to enhance sense of responsibility and diligence of the defendant towards the interest of stakeholders.
Further a class action avoids the situation where different court rulings could create "incompatible standards" of conduct for the defendant to follow. The Compa…

Corporate Social Responsibility (CSR) under New Company Law

Corporate Social Responsibility (CSR) is now accepted as a means to achieve sustainable development of an organization. Hence, it needs to be accepted as an organizational objective. The Companies Bill, 2012 will make Indian companies to consciously work towards that objective, as it requires a prescribed class of companies to spend a portion of their profits on CSR activities.

Businesses can no longer limit themselves to using resources to engage in activities that increase their profits. They have to be socially responsible corporate citizens and also contribute to the social good. Corporate Social Responsibility (CSR) is about integrating economic, environmental and social objectives with a company’s operations and growth. Many consider CSR philanthropy, but that is a limited definition. An organization can accomplish sustainable development if CSR becomes an integral part of its business process. 

CSR impacts almost every area of operations: governance and ethics; employee hiring, p…

Discussion paper on review of framework for buy back through open market purchase

On the basis of detailed data compiled and analysed by SEBI, It has observed that Buy back of shares through open market has not been able to achieve the desired purpose. It observed that the main reasons attributable for the same are:  Inspite of the buy backs offers remaining open for the entire 12 month period, in many a case, companies have not bought a single share.  Placing of buy orders at companies’ discretion instead of placing them on regular basis, and that too at a price away from the market price.

Corporate Governance Norms in India : SEBI Consultative Paper

In order to keep pace with fast changing business scenario , to align with the provisions of Companies Bill 2012 and to adopt international best practices relating to Corporate Governance, SEBI has come out with a consultative paper on Corporate Governance norms in India. The paper bring suggestion which will have far reaching effect and will completely change the landscape of Corporate Governance in case of listed companies. 
As per the concept note, the objective is to is to entice a wider debate on the governance requirement for the listed companies so as to adopt better global practices. While it needs to be ensured that the proposals suggested would not result in increasing the additional cost of compliances by huge margin and that the cost should not outweigh the benefit of listing, at the same time, it is necessary to bring back the confidence of the investors back to the capital market, for channelizing savings into investment, which is the need of the hour. Celebrating One Year of Its Launch

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Dear All,

Greetings of New Year 2013!
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