SEBI Launches 'Demat 2.0' Pilot For Tokenised Corporate Bonds

The Securities and Exchange Board of India (SEBI) has announced the successful launch of the “Demat 2.0” pilot for tokenised corporate bonds, which uses Distributed Ledger Technology for their issuance, holding, trading and settlement.Under the pilot, corporate bonds are issued as digital tokens on a shared ledger maintained by the market infrastructure institutions. The system is linked to the Reserve Bank of India's wholesale Central Bank Digital Currency e₹ through the Unified Market...

Adani Ports CEO Karan Adani Pays ₹13.65 Lakh To Settle SEBI Proceedings Over PMC Transactions

Adani Ports and Special Economic Zone Limited (APSEZ) Chief Executive Officer Karan Adani has paid ₹13.65 lakh to settle adjudication proceedings arising from alleged regulatory violations concerning transactions involving PMC Projects (India) Private Limited (PMC).APSEZ Chief Financial Officer B Ravi also paid ₹13.65 lakh to settle the proceedings. SEBI's Adjudicating Officer Jai Sebastian disposed of the matter after the regulator received the settlement amounts.SEBI's investigation concerned...

SEBI Proposes Changes To MII Board Director Criteria And KMP Appointment Process

On 9 September, the Securities and Exchange Board of India (SEBI) issued a consultation paper proposing measures to strengthen the governance of Market Infrastructure Institutions (MIIs), including revised criteria for appointment of directors to MII Governing Boards and a Standard Operating Procedure (SOP) for appointment of certain key managerial personnel. SEBI said MIIs were facing difficulties in finding suitable directors, particularly Public Interest Directors, due to restrictive...

SEBI Revises Client Position Limits And Penalty Norms For Commodity Derivatives

The Securities and Exchange Board of India (SEBI) on 9 September introduced revised norms governing client position limits and penalties for breaches in the commodity derivatives segment. SEBI said the revisions followed stakeholder representations, recommendations of the Working Group reviewing regulatory norms for the Agri Commodity Derivatives Segment, and inputs from the Commodity Derivatives Advisory Committee. Under the revised framework, penalties for client-level open-interest...

SAT Mumbai Refuses To Condon Karvy's 688-Day Delay Against SEBI Order, Finds Reasons Not Genuine

On Wednesday, 9 September, the Securities Appellate Tribunal (SAT) at Mumbai dismissed an appeal filed by Karvy Stock Broking Limited after refusing to condone a 688-day delay in challenging an order passed by a SEBI Whole Time Member. A Bench comprising Presiding Officer Justice P.S. Dinesh Kumar with Technical Members Meera Swarup and Dr. Dheeraj Bhatnagar observed that the reasons cited by Karvy for the delay were not based on genuine facts and that its application lacked bona fides. The...

Mere Release Of Escrow Account Does Not Bar Fraud Probe Under SEBI's PFUTP Regulations: Supreme Court

The Supreme Court on Wednesday held that mere release of an escrow amount under the Buyback Regulations does not create an automatic statutory bar against proceedings under the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (PFUTP Regulations). It held that the escrow-release inquiry is confined to determining whether the amount is liable to forfeiture and does not, by itself, answer the separate...

Supreme Court Remands Fraud Allegations In Vedanta's Cairn India ₹5,725 Crore Buyback To SAT

The Supreme Court on Wednesday remanded allegations of fraud relating to Vedanta's Cairn India's proposed ₹5,725 crore share buyback to the Securities Appellate Tribunal (SAT) for fresh adjudication. It held that unresolved discrepancies in the trading data relied upon by SEBI went to the root of the fraud finding.A Bench of Justices J.B. Pardiwala and K.V. Viswanathan clarified that the release of an escrow amount maintained for the buyback does not bar a separate inquiry into alleged fraud...

Supreme Court Disposes SEBI-NSE Appeals After Settlement In Co-Location, P2P Connectivity Dispute

The Supreme Court has disposed of the appeals arising from the dispute between Securities and Exchange Board of India (SEBI) and National Stock Exchange Ltd (NSE) over alleged irregularities in NSE's co-location facility and Point to Point (P2P) connectivity, after the parties settled the dispute between them with NSE making the entire payment demanded by SEBI.In its August 9, 2023 order, the Securities Appellate Tribunal (SAT) held that P2P connectivity did not provide Way2Wealth (W2W) or GKN...

SEBI, ESMA Sign Fresh MoU On Cooperation And Information Exchange Concerning CCPs

The Securities and Exchange Board of India (SEBI) and the European Securities and Markets Authority (ESMA) have signed a Memorandum of Understanding (MoU) aimed at strengthening cooperation and facilitating exchange of information sharing concerning Central Counterparties (CCPs) regulated by SEBI.The MoU replaces an earlier understanding between the two regulators executed on June 21, 2017.Under the new arrangement, SEBI and ESMA will cooperate on matters concerning CCPs in line with their...

SAT Upholds SEBI Action Against Omaxe Limited Over ₹647 Crore Round-Tripping, Calls Transactions Sham

The Securities Appellate Tribunal has recently upheld SEBI's findings against Omaxe Limited, a listed real estate company, and its senior officials over financial misstatements and circular movement of funds.Observing that the transactions were “not genuine”, the tribunal held that they were designed to “dress up the financial results”. It found that the arrangement created a false impression that the company had strong financials.It found that the transactions were not genuine. The tribunal...

Common Personnel Conditions Under Credit Rating Agency Rules Apply To Promoter's Borrowers, Subsidiaries: SAT

The Securities Appellate Tribunal has recently clarified that the conditions relating to common Chairmen, directors, and employees between a credit rating agency and an entity being rated also apply to borrowers and subsidiaries of the agency's promoter, and not only to its associates.The conditions appear in Regulation 27(1) of the SEBI (Credit Rating Agencies) Regulations, 1999. The tribunal found that there was “ambiguity and lack of clarity” over whether they applied to borrowers and...

NSE Clearing's Settlement Committee Cannot Order Restitution Of Liquidated Client Securities: Supreme Court

The Supreme Court on Wednesday ruled that the Member and Core Settlement Guarantee Fund Committee constituted by NSE Clearing Corporation had no statutory or bye-law power to direct Professional Clearing Members to restore securities liquidated after Trading Members defaulted.A Bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran held:“This is in stark violation of the power conferred by the statute and the byelaws also do not speak of any such power being conferred of disgorgement or...