SEBI (INFOMAL GUIDANCE) SCHEME 2003

In the interest of better regulation of and orderly development of the securities market, SEBI has issued a scheme called “Securities and Exchange Board of India (Informal Guidance) Scheme 2003” under section 11(1) of SEBI Act, 1992, which came into effect from 24^th June, 2003. 
This is a formal scheme with detailed procedure for providing Informal Guidance.

Eligibility

The persons eligible for seeking informal guidance under the said scheme are:-

• Intermediary registered with the board under Section 12 of the SEBI Act, 1992 i.e. merchant banker, stock-broker, banker to an issue etc.;
• Listed Company;
• Company which intends to get any of its securities listed and which has filed either a listing application with any stock exchange or a draft offer document with the board;
• mutual fund trustee company
• acquirer or prospective acquirer under takeover code

Forms of Informal Guidance

• No-action letters: In such a letter the concerned department  of SEBI would indicate that the said Department may or  may not recommend any action under any Act, Rules, Regulations, Guidelines, Circulars or other legal provisions administered by SEBI.

• Interpretive letters: The other category of letters that could be issued by a department of SEBI would provide an interpretation of a specific provision of any Act, Rules, Regulations, Guidelines, Circulars or other legal provision being administered by SEBI. The interpretation would be given in the context of a proposed transaction in securities or a specific factual situation.

Timeline for providing Informal Guidance

SEBI has to dispose of the request within 60 days after receiving the request. If necessary, the concerned SEBI department may give hearing or conduct an interview.

Legal Effect

Letter issued by a department of SEBI is the view of that department but the same is not binding on the SEBI and where a requestor or person suffered any loss or damage on account of the SEBI taking a different view from that taken in letter already issued under the scheme, in that case SEBI shall not be held liable, however, generally SEBI act in accordance with such letter.

Further, letter issued by a department of SEBI under the scheme is not to be taken as a conclusive decision of any question of law or fact by SEBI. In fact, such a letter cannot be construed as an order of the board under Section 15T of the SEBI Act and as such will not be appealable.

A person making a request to any department of SEBI under the Scheme will have to ensure that proper and complete facts and relevant information are provided. Because any letter issued by any department of SEBI under the Scheme as a result of fraud or misrepresentation of facts by the requestor, would result in such a letter becoming a nullity and of no legal consequence. In addition, the requestor would also be open to legal proceedings by SEBI.

Confidentiality

Request for confidentiality treatment can be made by any person submitting the letter under the scheme and the confidentiality request can be made for a specified period of time of maximum 90 days from the date of the department response.

Department can grant the request and in that case, the letter will not be available to the public until the expiration of the specified period and if, department reject the request, then in that case requestor will be so advised and such person may withdraw the letter within 30 days of receipt of the advise, in which case the fee, if any, paid by him would be refunded to him.

Lastly, one of the important issues raised by the scheme is that whether the response of any department of SEBI can be treated as ‘Informal’; when procedure for making and receiving the request along with the fees has been prescribed by the SEBI.

This Article has been Compiled by Swati Garg (Senior Associate)

You can direct your queries or comments to the author at swati@factumlegal.com

 Disclaimer-

The contents of this article should not be construed as legal opinion. This article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. We expressly disclaim any financial or other responsibility arising due to any action taken by any person on the basis of this article.

Seat and Venue of Arbitration-Key Considerations

Alternative Dispute Resolution (ADR) mechanism provides scientifically developed techniques to Indian judiciary which helps in reducing the burden on the courts. ADR offers to resolve all type of matters including civil, commercial, industrial and family etc., where people are not being able to start any type of negotiation and reach the settlement. In this article we tried to attract readers’ attention on how the seat of arbitration is significantly diverge from venue of arbitration, accordingly, both shall not be used inter-changeably.  Further, we have listed down some of the important points which need to be considered before drafting an arbitration clause under an agreement.

Introduction

It is important to understand the difference between the term venue and seat as agreed under the contract between parties. The distinction between venue and seat may be read as that the seat of arbitration is what determines the court having jurisdiction over the nullity claim of an award, while the venue is the physical location where the arbitration hearings or deliberations are held.

Supreme Court in the matter of Bharat Aluminium Co vs Kaiser Aluminium Technical ... on 6 September,2012 held:
The legal position that emerges from a conspectus of all the decisions, seems to be, that the choice of another country as the seat of arbitration inevitably imports an acceptance that the law of that country relating to the conduct and supervision of arbitrations will apply to the proceedings.

It implies that when parties chose another country as a seat of arbitration, then parties deliberately accepted that the law of that country relating to the conduct and supervision of Arbitrations will apply to the proceedings.

Accordingly, even if the contract state that the Indian Arbitration Act shall govern the arbitration proceedings, Indian courts cannot exercise supervisory jurisdiction over the Arbitration or the award. However, section 9 (interim relief), Section 27 (court assistance for evidence), Section 37(1)(a) (appeal able orders) of the Arbitration and Conciliation Act 1996 will remain available to parties in a foreign Seated Arbitration.

Also, in the matter of Mankastu Impex Private Limited Vs Airvisual Limited No. 32 of 2018  dated 05.03.2020, the hon’ble Supreme Court held as follow:

The seat of arbitration is a vital aspect of any arbitration proceedings. Significance of the seat of arbitration is that it determines the applicable law when deciding the arbitration proceedings and arbitration procedure as well as judicial review over the arbitration award. In Enercon (India) Limited and Ors. v. Enercon GMBH and Anr. MANU/SC/0102/2014 : (2014) 5 SCC 1, the Supreme Court held that "the location of the Seat will determine the courts that will have exclusive jurisdiction to oversee the arbitration proceedings. It was further held that the Seat normally carries with it the choice of that country's arbitration/curial law". It is well-settled that "seat of arbitration" and "venue of arbitration" cannot be used inter-changeably.

Accordingly, the Supreme Court made the distinction between the seat of arbitration and venue of arbitration ample clear by stating that the seat of arbitration is crucial to be decided carefully as it determines the applicable law when the arbitration proceedings and arbitration procedure for deciding the dispute between the parties.

Some of the important points to be considered before drafting an arbitration clause in an agreement  

• The Seat of Arbitration it is of vital importance, for it is the courts of the Seat that have the supervisory jurisdiction over the arbitral process.

• Selection of seat of arbitration, implied selecting the law applicable on arbitration i.e. appointment of arbitrator, procedure, awards etc.

• It is not necessary that the seat of arbitration and venue of arbitration should be same, the seat and venue may be different, and the chosen Seat of Arbitration will remain unaffected independent of the geographical place where the hearings take place.

Important points to be considered while drafting arbitration clause:
·    

• Contract shall unambiguously define the composition of the arbitral tribunal, time for appointment and the language of the proceedings.

• Parties must decide on law governing the arbitration agreement and also the procedural rules if any for conducting arbitration which, in addition to the arbitration law of the seat of the arbitration, will govern the arbitration procedure;

• In the event, if the seat of arbitration and venue are different, the contract should clearly provide that the seat of Seat of Arbitration would be the governing law of arbitration and the same will remain impervious even if the hearings happen at various places/locations.

• Parties should specify the language of the arbitration, particularly if the parties and their respective witnesses speak different languages, or if the law of the country governing the arbitration specifies that in the absence of any agreement between the parties, the arbitration should be conducted in the national language of that country. Failure to specify the language of the arbitration may ultimately result in parties having to incur expensive and unnecessary costs for translating documents and witness evidence.

For readers’ insight

Parties who are considering India as a seat of arbitration should think carefully about the implications of Arbitration and Conciliation Act, 1996 including amendment vide Amendment Act, 2015 and 2019. In particular, the increasing role of government in arbitration and the limits on who may sit as an arbitrator in Indian seated arbitrations may mean that an Indian seated arbitration would be chosen after complete deliberation.

This Article has been Compiled by Deepika Sharma  (Associate)
You can direct your queries or comments to the author at deepika@factumlegal.com

 Disclaimer-
The contents of this article should not be construed as legal opinion. This article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. We expressly disclaim any financial or other responsibility arising due to any action taken by any person on the basis of this article.

REDUCTION OF SHARE CAPITAL “IN ANY MANNER”

This Article focuses on the modes of reduction of capital under the head “In Any Manner” as prescribed under section 66 of the Companies Act, 2013 other than those specified under the section.

The reduction of share capital means reduction of issued, subscribed and paid up share capital of the company. Previously, reduction of share capital was governed by section 100 to 104 of the Companies Act, 1956, whereas upon enactment of the Companies Act, 2013, the reduction of capital is governed by section 66 read with other applicable sections and rules thereunder.

Section 66 of the Companies Act, 2013 reads as follows:

“Reduction of share capital.—(1) Subject to confirmation by the Tribunal on an application by the company, a company limited by shares or limited by guarantee and having a share capital may, by a special resolution, reduce the share capital in any manner and in particular, may—

(a) extinguish or reduce the liability on any of its shares in respect of the share capital not paid up; or

(b) either with or without extinguishing or reducing liability on any of its shares,—

(i) cancel any paid-up share capital which is lost or is unrepresented by available assets; or

(ii) pay off any paid-up share capital which is in excess of the wants of the company, alter its memorandum by reducing the amount of its share capital and of its shares accordingly:

 Provided that no such reduction shall be made if the company is in arrears in the repayment of any deposits accepted by it, either before or after the commencement of this Act….”

A reduction of capital often involves the reduction of the same proportion of the shares of the company on similar terms and conditions offered to each shareholder whose shares are being reduced.

What is the meaning of “any other manner”?

• Section 66 of the Companies Act, 2013 authorizes the company to reduce its capital in ‘any manner’ the company deems fit, which implies that the company can carry out a selective reduction of capital.
• A ‘selective’ reduction of capital differentiates between shareholders of the same class by resulting in compulsory extinguishment of capital of some shareholders, while leaving the other shareholders untouched.
• Section 66 of the Companies Act, 2013 allows a company to undertake a capital reduction in any manner subject to, amongst other things, (i) the approval of the shareholders by way of special resolution; (ii) the approval of the National Company Law Tribunal (NCLT); and (iii) the accounting treatment for such reduction being in conformity with the accounting standards specified under the Companies Act, 2013.
• If a company decides to selectively reduce its capital, the articles of association of the company ought to allow the company to reduce its capital from time to time, and in any manner for the time being authorised by law.

Jurisprudence on Selective Capital Reduction under the CA, 2013

The NCLT is only authorised to sanction a reduction of uncalled liability or a repayment of capital if it is satisfied that creditors have agreed, or have been paid, or have their debts secured. Here, it would be useful to examine the extent to which selective reduction of capital has been permitted by the courts in India.

CASE LAWS

a) In CSC India Private Limited, National Company Law Tribunal, Mumbai Bench in its order dated 04.01.2019 stated : “…the company is of the view that the funds are in excess of its wants and has undertaken the proposed capital reduction. The explanation provided by the petitioner company, it appears that the petitioner company has adequate sources of fund to pay the consideration proposed to be discharged in cash.”

“8) The Learned practising company secretary appearing on behalf of the petitioner company further submits that the petitioner company has complied with all the statutory requirements as per the directions of the Tribunal and they have filed necessary affidavit of service. None of the parties have come forward to oppose the proposed reduction.”

To which the Hon’ble NCLT   had allowed the petition stating “Petition for reduction of share capital allowed subject to the direction given herein above. All concerned regulatory authorities to act on certified copy of the Order and the form of Minutes forming part of the petition, duly certified by the Deputy Director, National Company Law Tribunal.”

      b) In Reckitt Benckiser (India) Ltd. vs Unknown, the Delhi High Court held that the majority had the right to decide the manner in which the shareholding is to be reduced and in the process they can decide to target a particular group (subject to this being without with mala fide and unfair motive). 

       

       The court held  The company limited by shares is permitted to reduce its share capital in any manner, meaning thereby a selective reduction is permissible within the framework of law (see Re. Denver Hotel Co., 1893 (1) Chancery Division 495).

      c) In Cadbury India Limited, Bombay High Court had approved the selective reduction of    share capital scheme provided it is fair, just and reasonable.

    d) In Digi Smart Digital Media Private Limited (05.07.2019 - NCLT - Chandigarh) it was observed that “while reducing the share capital, company can decide to extinguish some of its shares without dealing in the same manner as with all other shares of the same class. The company limited by shares is permitted to reduce the share capital in any manner, thereby a selective reduction is permissible within the framework of law. On the question of valuation as well, an observation was that valuation of shares is a technical matter, which requires considerable skill and experience. If the stakeholders are satisfied with the value, can approve the transaction of reduction of share capital which should not deemed to be inequitable or unfair transaction.”

Author’s remark 

It is imperative to note that a scheme of reduction shall carry the following three components: (i) the majority of the minority shareholders approve the scheme, (ii) the reduction of share capital is fair and equitable and (iii) fair and just methodology adopted for valuation of the shares (While reducing capital, the price offered by the company to the shareholders, in other words the valuation of the shares, is of paramount importance) for a smooth and successful reduction of capital.

It is difficult for the courts to decipher the intent behind selectively reducing the share capital (whether the reduction in the capital is induced to drive out the minority shareholders or for a rearrangement of the balance sheet of the company). However, the onus lies on the company undertaking the reduction to demonstrate that the reduction is fair to minority share.

This Article has been Compiled by Richa Singh  (Associate)

You can direct your queries or comments to the author at richa@factumlegal.com

  

 Disclaimer-

The contents of this article should not be construed as legal opinion. This article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. We expressly disclaim any financial or other responsibility arising due to any action taken by any person on the basis of this article.

CONCEPT NOTE ON COMPANIES FRESH START SCHEME, 2020

Introduction of Companies Fresh Start Scheme (CFSS), 2020

In line with existence pandemic of COVID-19 in our country and in order to give boost to the economy through corporate sector, the Indian government have decided to take some effective measures to rise in existing circumstances of global economy slowdown. In order to smoothen the corporate machineries and to protect the economy from the adverse effects created by the pandemic. The government through its various ministries have decided to come up with various circulars and notifications in their respective areas. As part of this initiative Ministry of Corporate Affairs (MCA) has come up with the general circular No. 12/2020 dated 30/03/2020 Companies Fresh Start Scheme, 2020 enabling the companies for a fresh start by removing the stain of non-compliant on the name of the company. Under this Scheme a relief can be sought by those Companies who have committed unintentional contravention of the Companies Act, 2013 (Act 2013) or Companies Act, 1956 (Act 1956) however the relief has been limited to certain kinds of non-compliance only.

Duration of (CFSS), 2020

The Scheme shall be effective w.e.f. April 01, 2020 and valid upto September 30, 2020. A total period of 6 months has been allowed  to the defaulting companies to make their default good pursuant to this scheme.

Meaning of defaulting Company

Defaulting Companies has been defined under the Scheme 2020 as

“means a Company defined under the Act 2013, and which has made a default in filing of any of the documents, statement, returns, etc. including annual statutory documents on the MCA -21 registry”

Applicability of the Scheme

The Scheme shall be applicable only to the defaulting companies in respect of belated documents which were due for filing with MCA 21 Portal. i.e. the scheme is not an enablement to the individuals. For instance, under Section 90 of the Companies Act 2013, Significant Beneficial Owner is required to file form BEN-1 to the reporting Company for its internal record which is not to be filed with MCA portal. However, the reporting company is required to file form BEN-2 with MCA 21 portal.

In such situation, reporting company may file the e-form BEN 2 without any additional fees under the Scheme 2020 but the person required to declare under BEN 1 will be in contravention of the said section similar view can be taken with DIR 2 as well.

In brief, it can be stated that any company which has failed to file any document, e-form, order or declaration with MCA can now file the said documents or e-form etc. under the Scheme 2020.

                 

Immunity

Application for immunity

The period for which application is allowed to be filed by the applicant to obtain certificate of immunity shall commence from the closure of the Scheme and upto 6 months from the closure of the scheme, in respect of the belated documents filed with the MCA during the tenure of the Scheme 2020. The said application can be made in form CFSS-2020 for which no fees is required to be paid by the applicant.

Exception of immunity

It should be noted that the company will be excused only with respect to the penalties or proceedings in relation to the non-filing of the belated documents and certificate will not cover the consequential proceedings involving the interest of the shareholders or any of director or Key Managerial Personnel.

Pre-Condition to apply for immunity

Any appeal that has been filed by the defaulting Company against notice issued or compliant filed or an order passed by the court or by adjudicating authority for violation of the  under the Companies Act, 1956/2013, shall be required to withdraw by the defaulting Company before filing an application to obtain certificate of immunity. The evidence of withdrawal of appeal made shall be required to attach in application form CFSS-2020.

Effect of immunity

After observing the declaration made in the application form CFSS-2020 the designated authority shall issue a certificate of immunity. The Immunity Certificate will restrain any proceedings or action against the Company with respect to defaults for which the certificate has been granted without any further proceedings.

Non-applicability of the Scheme 2020

• To companies against which action for final notice for striking off the name u/s 248 of the Act 2013 has already been initiated by the Designated Authority;
• Where an application has already been filed by the companies for the action of striking off the name of the Company form the register of Companies;
• To companies which have amalgamated under a scheme of arrangement or compromise under the Act 2013;
• Where applications have already been filed for obtaining Dormant Status under Sec 455 of the Act 2013 before this Scheme 2020;
• To Vanishing Companies {explanation to sub-rule 1 of Rule 3 of The Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016};
• Where an increase in authorized capital is involved and charge related documents i.e. (SH 7, CHG 1/4/8 and 9);
• Where any court has ordered conviction in any matter;
• An order has been passed by an adjudicating authority under the Act 2013; or (and no appeal has been preferred against the order passed in point no g & h before the Scheme 2020 comes to force)
• Any appeal pending before the court of law and in case of management disputes of the company pending before any court of law or tribunal.

Benefits in respect of specified forms apart  from regular filings

Last Year in 2019, MCA came with some extra compliances on part of Companies in pursuant to Companies (Amendment) Act, 2019. These Compliances includes the filing of forms such as BEN-2, DIR-3-KYC, DIR-3-KYC, INC-22A (ACTIVe) and MSME, DPT-3 with MCA registry. Now all these forms may be filed by the Company between 1st April, 2020 to 30th September, 2020 without any additional filing fee where applicable by availing the benefits under the said CFSS, 2020. All these forms to be filed apart from the annual filings in form AOC-4/ AOC-4 CFS/ AOC-4 XBRL and MGT-7.

This Article has been Compiled by Akash Gupta (Senior Associate)

You can direct your queries or comments to the author at akash@factumlegal.com

Disclaimer-

The contents of this article should not be construed as legal opinion. This article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. We expressly disclaim any financial or other responsibility arising due to any action taken by any person on the basis of this article.

ANALYSIS – SEBI (SETTLEMENT PROCEEDINGS) REGULATIONS, 2018

INTRODUCTION

Settlement Proceedings in relation to violation of provisions in securities laws have been conducted under a mechanism by the Securities Exchange Board of India (“SEBI”) since 2007. The last legislation on settlement proceedings was stipulated by SEBI in 2014. The said regulations apart from giving SEBI other powers of initiating proceedings on its own, also gave it the power to initiate settlement proceedings.

However, over a period, certain loopholes were noticed within the functioning of SEBI and the settlement regulations which hindered its effective implementation. It was noticed that certain applicants were prevented from settling securities violation in cases where they have settled too many applications within a specific period or have repeatedly attempted to settle the same offence, and the Settlement Regulations placed restrictions on certain categories of serious offences which could not be settled via consent mechanism including default relating to trading, failures to make an open offer, and serious fraudulent and unfair trade practices. Another major drawback was a lack of transparency in the system of calculating settlement amount, which brought in unpredictability in calculation of profit and loss.

Therefore, a committee was set up by SEBI under  the  Chairmanship  of Justice Anil Dave Committee (“Committee”) , former judge of the Supreme Court of India which came out with a report on Settlement Mechanisms under securities laws which attempts to revamp the settlement proceedings. Thereafter,    on    requisite    consideration    on    the    public comments,  the  changes  to  settlement  mechanism  were  agreed  upon by SEBI  in  its Board   Meeting   held   on   Tuesday,   18thSeptember,   2018 which henceforth approved  the  framing  of Securities  and  Exchange  Board  of  India (Settlement Proceedings)  Regulations,  2018 (“Settlement Regulations, 2018”) which replaced the SEBI  (Settlement  of  Administrative  and  Civil  Proceedings)  Regulations,  2014 (“Settlement Regulations, 2014”) vide the notification dated 30th November, 2018 The said regulations shall come into effect from 1st January, 2019. The Settlement Regulations are the first piece of legislation in securities laws in India solely created for the purpose of regulating settlements in cases.

“SECURITIES LAWS” AND “SPECIFIED PROCEEDINGS” RE-DEFINED

The most important change that has been brought vide Settlement Regulations, 2018  is  widening  the  scope  of the  laws  covered  under  the  proceedings. Securities Laws under the previous SEBI regulations on settlement proceedings had only given scope to the SEBI Contract (Regulations) Act, 1956 and Depositories Act, 1996. These regulations widen the scope by defining “Securities Laws” as:

“securities laws” means the Act, the Securities Contract (Regulations) Act, 1956 (42 of 1956), the Depositories Act,1996 (22 of 1996), the relevant provisions of any other law to the extent it is administered by the Board and the relevant rules and regulations made thereunder;

By adding “any other law”, the Settlement Regulations provide for the inclusion of other laws as well in relation to securities laws. This clause has widely increased the ambit of applicable laws to these regulations.

Further, “specified proceedings” in the Settlement Regulations have been defined as:

“specified proceedings” means the proceedings that may be initiated by the Board or have been initiated and are pending before the Board or any other forum, for the violation of securities laws, under Section 11, Section 11B, Section 11D, sub-Section (3) of Section 12 or Section 15-I of the Act or Section 12A or Section 23-I of the Securities Contracts (Regulation)Act, 1956 or Section 19 or Section 19H of the Depositories Act, 1996, as the case may be;

The definition provides for scope to cases which are pending before the SEBI Board or any other forum which is an effective tool to quantify settlement proceedings. The scope of pending cases has been re-iterated in further regulations of the Settlement Regulations.

LIMITING THE SCOPE OF SETTLEMENT PROCEEDINGS

There are provisions in the new Settlement Regulations which deny settlement proceedings to certain categories of individuals under Chapter III which talks about the scope of settlement proceedings. Regulation 5 (2) lays down factors affecting which an alleged default will not come under the scope:

(2) The Board may not settle any specified proceeding, if it is of the opinion that the alleged default, –

1.      has market wide impact,

2.      caused losses to a large number of investors, or

3.      affected the integrity of the market.

Further, the scope  of  settlement  of  specified  proceedings  which  shall  be  taken  into consideration has  also  been  narrowed to  the  extent  that  any  application  made  by  a wilful  defaulter,  a  fugitive economic  offender  or  a  person  who  has  defaulted  in payment  of  any  fees  due  or penalty  imposed  under  securities laws  shall  not  be considered  by  SEBI.

The earlier regulations provided that breach of laws governing insider trading, fraudulent and unfair trade practices shall not be considered for settlement. However, in the Settlement Regulations, the scope of the settlement has been limited to non-triggering of the above factors.

WITHDRAWAL OF APPLICATION

Before communication of the decision by the panel members an application can be withdrawn by the applicant. Further, when an application is withdrawn by the applicant, then, he is not permitted to make another application in respect of the same default.

CONCEPT OF SETTLEMENT SCHEMES

The  Settlement  Regulations,  2018 have introduced a new term called “settlement schemes”. SEBI  shall specify  the  procedure  and  terms  of  settlement  of  specified proceedings under a settlement scheme for any class of persons involved in respect of any  similar  defaults specified. A  settlement  order  issued  under such  a  settlement scheme shall deemed to be a settlement order under the regulations.

CONFIDENTIALITY

To keep up with the development in consent mechanism globally, the Settlement Regulations 2018 have also introduced the concept of settlement of the proceedings in confidentiality. The regulations accord privilege of confidentiality to such applicants who agree to provide “substantial assistance in the investigation, inspection, inquiry or audit to be initiated or ongoing, against any other person in respect of a violation of securities laws”.

CONCLUSION

The Settlement Regulations have changed and improved the mechanism for settlement proceedings in securities laws in the country. Settlement Regulations 2018 has bolster the consent mechanism and reduce the administrative burden while also ensuring that casual defaulters and perpetrators of serious offences are not given leeway under the mechanism. 

The SEBI  has revisited  the  complete mechanism in  order  to  strengthen its  procedures  with  respect  to the settlement of proceedings pertaining to the defaults under the securities laws. However, there are certain critical aspects on which the regulations are mute. For instance, the definitions of "market-wide impact" and "large number of investors" in the regulations still remain subject to the SEBI’s discretion. It is important that the SEBI clarifies these issues to ensure that the settlement mechanism emerges as a holistic approach allowing for a speedy relief in comparison to its time consuming alternatives.

This Article has been Compiled by Swati Garg (Senior Associate)

You can direct your queries or comments to the author at Swati@factumlegal.com

Disclaimer-

The contents of this article should not be construed as legal opinion. This article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. We expressly disclaim any financial or other responsibility arising due to any action taken by any person on the basis of this article.