SEBI Act 1992

Summary: Over the past 25 years, India’s economic law-making has shifted decisively from Parliament to regulators, with statutes such as the Companies Act, 2013 and the SEBI Act, 1992 supplying only a bare framework while the operative detail is filled in through rules, regulations, and circulars. Clause 147 of the Securities Markets Code, 2025 seeks to discipline this shift by embedding a structured, consultative, ex-ante process into SEBI’s rule-making power, coupling it to regulatory impact assessment and continuing proportionality review obligations elsewhere in the Code. This piece argues that the template Clause 147 establishes should not remain confined to securities law and should be extended to all other economic statutes which lack equivalent safeguards and would benefit from the same five-element architecture of pre-publication consultation, impact assessment, sunset review, and internal vires-certification.

Continue Reading Guarding the Guardians: Building Statutory Discipline into India’s Delegated Legislation

Extra-territorial application of India’s securities law – Has SEBI cast its net too wide?

“If a connection exists, it is for the Legislature to decide how far it should go in the exercise of its powers.[1]”

Introduction

The territorial application of laws made by Parliament is enshrined in Article 245 of the Constitution of India (“Constitution”). The universal presumption that laws made by a country are limited to its own territorial borders, is provided under Article 245(1) of the Constitution, which provides that “Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India.” However, Article 245(2) of the Constitution carves out a specific exception providing that a law made by Parliament, pursuant to Article 245(1), shall not be invalidated on the ground that such a law would have extra-territorial operation. Most countries have enacted extra-territorial laws with the US being the clear leader in this regard having enacted anti-corruption law, securities laws etc. which have extra-territorial application.Continue Reading Extra-territorial application of India’s securities law – Has SEBI cast its net too wide?

WHAT IS FRONT RUNNING – A Q&A PIECE IN LIGHT OF THE SEBI ORDER AGAINST DEALERS OF RELIANCE SECURITIES LTD

Introduction

In an interim ex-parte order last month against the dealers of Reliance Securities Limited (“RSL”) and other related entities (“RSL Order”)[1], SEBI prima facie held over two dozen entities to have engaged in front running the trades of Tata Absolute Return Fund, a scheme of Tata AIF (“Big Client”).

During its preliminary examination, SEBI meticulously pieced together several bits of available circumstantial evidence and alleged an archetypal scheme of front running purportedly employed by three senior dealers (“Dealers”) at RSL, in nexus with various related entities. The RSL Order alleges that once the Dealers at RSL were privy to the non-public information of the impending orders of Big Client, they along with their connected broker or dealer entity would, through multiple trading accounts directly or indirectly controlled by them, place trades either in the Buy-Buy-Sell pattern or Sell-Sell-Buy pattern, around the time of the orders of the Big Client to generate substantial proceeds.
Continue Reading What is Front Running? – A Q&A Piece in Light of the SEBI Order Against Dealers of Reliance Securities Ltd.

Securities Law Enforcement - Calibrating the Discipline of Penalty Imposition

Equipped with broad statutory powers, the Securities Exchange Board of India (SEBI) has been hard at work for the past 30 years, shouldering the herculean task of managing the Indian securities market, through both regulation and enforcement. Naturally, to help SEBI respond to and deal with evolving challenges, its powers, specifically those under the Securities Contracts (Regulation) Act, 1956 (SCRA) and the SEBI Act, 1992 (SEBI Act), have been continuously at play, allowing it to mete out a wide range of penalties, both monetary and substantive. SEBI’s exercise of such powers, in its capacity as a quasi-judicial authority, has increasingly become a subject-matter of appellate interest, on questions of both jurisdictional remit and proportionality of penal action.
Continue Reading Securities Law Enforcement: Calibrating the Discipline of Penalty Imposition