Investment and Securities Law

Savitribai Phule Pune University · LL.B. Semester 3 · LDSE 0705

Unit 1 — Regulatory Framework to Govern Securities in India:

1. Historical evolution of Investment and Securities Laws · 2. Concept of Securities · 3. Kinds of Securities - Ownership instruments, Shares, Stocks · 4. Debt instruments - Debentures and Bonds · 5. Offered Documents – Prospectus · 6. Norms of disclosure under different laws - the Companies Act, 2013, the Securities Contracts (Regulation) Act, 1956 and the Securities Exchange Board of India Act, 1992 (only relevant provisions)

Unit 2 — Concept of Securities Market and Securities Market Intermediaries

1. Primary Market: Scheme of Primary Market, Advantages - Disadvantages to Companies and investors. · 2. Provisions relating to IPO, FPO, Private placement, bonus issue, Qualified Institutional Placement under the SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2018 · 3. Primary Market intermediaries - Merchant Banker, Managers to issue, Registrar and Share Transfer Agent, Bankers to the issue, Brokers, Syndicate Members · 4. Secondary Market intermediaries - Registrar and Share Transfer Agent, Brokers / sub-brokers, Portfolio Managers, Investment Advisers, Research Analyst, Credit Rating Intermediaries, Clearing Corporations

Unit 3 — Securities and Exchange Board of India and the Depositories Act, 1996:

1. Background and Introduction, Constitution of SEBI · 2. SEBI - Power and Functions, Role of SEBI in securities market. · 3. SEBI - Power to issue Informal Guidance · 4. SEBI - Power to issue Regulations, Rules under Securities Market · 5. Constitution of Securities Appellate Tribunal (SA), SAT- Power and Functions · 6. The Depositories Act, 1996 - Rights and Obligations of depositories, Depository Participants, Issuers and beneficial owners, Penalties. Dematerialization and Rematerialisation of securities (Procedure, Advantages and Disadvantages) · 7. Relevant provisions of the Companies Act, 2013

SEBI — formation of SEBI Board, role of SEBI (Banking Companies and NBFC's)

Unit 4 — Stock Exchange and Investor Protection:

1. The Securities Contracts (Regulation) Act, 1956 - Recognized stock exchanges, listing of securities, penalties and procedure · 2. Procedure for a stock exchange to be a recognized Stock Exchange, Power of Government, procedure for de- recognition of a stock exchange · 3. Concept of Demutualization of stock exchanges and its impact on the Indian economy and the Regional stock exchanges · 4. Minimum public shareholding and its advantages to shareholders and stakeholders · 5. Trading, Spot delivery contract, Badla Contract, Future contracts, Options, · 6. Derivatives, Listing of Shares · 7. Investors Protection mechanism under various statutes: Role and functions of SEBI Tribunal, the Companies Act, 2013 - Acceptance of deposits, Misstatement in prospectus, fraudulently inducing person to invest money, non-payment of dividend, right to demand financial statement, Investor · 8. Education and Protection Fund, class action suits

Unit 5 — Insider Trading and Takeover Code: Insider Trading:

1. Insider Trading: Meaning and Definition of Insider Trading. Insider, connected person, deemed to be connected, trading, Unpublished price sensitive information, generally available information, Chinese wall, Compliance Officer, Trading Window, Pre- clearance, Code of Conduct) · 2. Penalty for Insider Trading 3. Position in UK and USA Takeover Code: · 1) Meaning and definition of control, voting rights, shares, acquirer, target company, Person acting in concert, deemed to be connected person, acquisition of shares, open offer, public announcement, offer letter, offer price · 2) Shareholding thresholds / Triggers under Takeover Code · 3) Procedure of public announcement and open offer · 4) Exemptions (general and specific exemptions)

Insider Trading

Unit 6 — SEBI (Listing Obligations and Disclosure Requirement Regulations):

1. Meaning and purpose of listing and delisting, advantages and disadvantages · 2. Principles governing disclosures and obligations of listed entity · 3. Listing Agreement · 4. Compliance Officer · 5. Grievance Redressal Mechanism · 6. Corporate Governance Norms - directors, women directors, independent directors, audit committee, risk management committee, remuneration committee, stakeholder relationship committee, maximum number of directorships, related party transactions, obligations of independent directors · 7. Disclosure of event or information under SEBI Regulations · 8. Re-classification of promoters into non-promoters · 9. Annual report

Unit 7 — Foreign Investment Laws:

1. The Foreign Exchange Management Act, 1999 – · a) Regulation and management of Foreign Exchange · b) Contravention and Penalties · c) Adjudication and Appeal · d) Directorate of enforcement · e) Inbound and outbound investment in India (Foreign Direct Investment and Overseas Direct Investment) · f) Setting up of Joint Ventures and Wholly owned subsidiaries in India and outside India · 2. Regulation of Foreign Institutional Investors (FII) / Foreign Portfolio Investor · (FPI) in India Participatory Note

The Foreign Exchange Management Act, 1999 (FEMA)