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...

SEBI Penalises 3 Directors Of Citrus Check Inns For Continued Investor Collections After Regulatory Ban

On 31 August, the Securities and Exchange Board of India (SEBI) imposed a Rs. 25 lakh penalty jointly and severally on three directors of Citrus Check Inns Limited for violating SEBI's directions issued in 2015. Adjudicating Officer Medha Sonparote passed the order against Omprakash Basantlal Goenka, Prakash Ganpat Utekar and Venkatraman Natarajan. She held: “It is not the case of the Noticees that they did not get enough time to comply with the SEBI Orders. The first Order of SEBI was in June...

SEBI Bars Trafiksol ITS Technologies From Securities Market For 1 Year Over Misleading IPO Disclosures

The Securities and Exchange Board of India (SEBI) on 28 August restrained Trafiksol ITS Technologies Limited (TITL) and its promoters Jitendra Narayan Das and Poonam Das from accessing the securities market for one year over misleading disclosures in the company's Initial Public Offering (IPO) prospectus. SEBI Whole Time Member Amarjeet Singh also imposed a penalty of Rs. 30 lakh on TITL, Rs. 50 lakh on Jitendra Das and Rs. 25 lakh on Poonam Das. He held: “…..the conduct was not a mere...

SEBI Proposes Relaxation Of Merchant Banker Requirement For Small Value Debt Private Placements

On 27 August, the Securities and Exchange Board of India (SEBI) proposed exempting listed issuers regulated by a financial sector regulator from appointing a merchant banker for private placement of small-value debt securities, subject to specified conditions. SEBI said the proposal seeks to address operational difficulties and reduce costs associated with small-value debt issuances, which it said could help develop the market and encourage more frequent issuances. At present, Clause 1.3 of...

Delhi High Court Dismisses PIL Against IFCI's ₹440.93 Cr NSE Share Sale For Petitioner's Forum Shopping

On 19 August, the Delhi High Court dismissed a Public Interest Litigation (PIL) challenging IFCI Ltd's sale of shares in the National Stock Exchange of India Ltd (NSE), holding that the petitioner had suppressed an earlier proceeding before the Bombay High Court on the same issue. A Division Bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia held that the petitioner's suppression of the earlier proceeding disentitled him to relief and imposed exemplary costs of Rs....

SEBI Moves Supreme Court Against Kerala HC Ruling Dismissing Its Appeal Over Ramachandran Escrow Funds

On 22 August, the Securities and Exchange Board of India (SEBI) filed a special leave petition (SLP) before the Supreme Court challenging a Kerala High Court judgment which dismissed its appeal over funds lying in an escrow account linked to late filmmaker and jeweller M.M. Ramachandran and Atlas Jewellery. A Division Bench of the Kerala High Court had held that SEBI, which was not the original writ petitioner, could not challenge the judgment in proceedings initiated by Axis Bank. It had...

SEBI Signs MoU With RRU, NISM For Cybersecurity Training And Securities Market Innovation

The Securities and Exchange Board of India (SEBI) on 24 August signed a tripartite Memorandum of Understanding (MoU) with Rashtriya Raksha University (RRU) and National Institute of Securities Markets (NISM) to collaborate on capacity building, research, education, training, policy support, institutional cooperation and knowledge exchange. Under the MoU, the three institutions will jointly conduct training programmes, workshops, certification courses, executive education programmes and...

SEBI Mandates IT Resilience Index And Early Warning System For Market Infrastructure Institutions

The Securities and Exchange Board of India (SEBI) on 24 August introduced an IT Resilience Index (ITRI) framework for Market Infrastructure Institutions (MIIs) to assess the robustness and resilience of their IT systems. The ITRI will measure the robustness of critical systems of MIIs and related systems across nine parameters, including availability, security, integrity, governance, reliability and monitoring, business continuity, modularity and flexibility, scalability, and incident handling....