Insider Trading Regime

Introduction

Across jurisdictions, the mischief of insider trading is sought to be curbed and punished by the market regulators since any securities market of repute would measure its success, among other variables, based on the integrity and fairness of transactions conducted on its platform. As such, the prohibition of insider trading stems from the moral imperative, which demands that there is no information asymmetry between insiders and other shareholders while dealing in listed securities. This effectively translates into restraint being exercised by insiders i.e. the persons who have access to the unpublished price sensitive information in relation to the listed securities in which they deal.

Continue Reading Winds of Change – The Recent Judicial and Legislative Developments in Insider Trading Regime

Regulatory overload on Audit Committees

Background

The regulatory architecture under the Companies Act, 2013 (“Act”), and the SEBI (LODR) Regulations, 2015 (“LODR”) places significant emphasis on the functioning of various committees of the Board of Directors (“Board”) of a listed company. While all Board committees have been entrusted with important responsibilities, a disproportionate amount of the regulatory burden has been placed on the Audit Committee. The Audit Committee has multifarious responsibilities under Section 177 and various other provisions of the Act, the LODR, and the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”).

Continue Reading Regulatory overload on Audit Committees – Is there a need to have a fresh look at its role?

The Sound of SEBI’s Silence Will the Factorial Order Change the Rules of the Game

Last month, the Securities Appellate Tribunal (SAT) passed an order in favour of Factorial Master Fund[1] (Factorial). This overturned the order of the SEBI Whole Time Member who had held that Factorial had contravened the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations) by trading in the securities of L&T Finance Holdings Limited (LTFH), while in possession of unpublished price sensitive information (UPSI).

Continue Reading The Sound of SEBI’s Silence: Will the Factorial Order Change the Rules of the Game?