Blogs

SEBI Releases FAQs on Insider Trading

Author: thinkinglegal | Oct 13 2020 | Tags: Regulatory Advisory & Dispute Resolution

On October 8, 2020, SEBI released the most recent FAQs further clarifying procedural aspects relating to the SEBI (Prohibition on Insider Trading) Regulation, 2015. These FAQs answer some of the questions that were left unanswered in the previous FAQs on insider trading released on November 4, 2019. The FAQs covered queries regarding pre-clearan...

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SEBI Imposes Stiff Penalty for Communication of UPSI

Author: thinkinglegal | Sep 10 2020 | Tags: Regulatory Advisory & Dispute Resolution

In the world of hyper connectivity and rapid technological advancement, the Gordon Gekkos of today’s world don’t need to rely on traditional models of corded Beetle landlines. They have a plethora of applications and social media platforms to choose from their smartphones to discuss unpublished price sensitive information (“UPSI”). To deal ...

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Feedback on the Draft Non-Personal Data Governance Framework

Author: thinkinglegal | Sep 09 2020 | Tags: Data Protection & Privacy

The Ministry of Electronics and Information Technology has released the Draft Non-Personal Data Governance Framework (“Report”) and invited suggestions from the public. In this piece we have discussed the issues that should be considered by the Ministry of Electronics and Information Technology before implementing the recommendations made by Co...

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Regulation of Non-Personal Data

Author: thinkinglegal | Aug 17 2020 | Tags: Data Protection & Privacy

The Ministry of Electronics and Information Technology has released the Draft Non-Personal Data Governance Framework (“Report”) and invited suggestions from the public. The Report has been prepared by a Committee of Experts constituted under the chairmanship of Mr. Kris Gopalakrishnan (“Committee”) on September 3, 2019. The Committee mak...

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SEBI Amends Investment Adviser Regulations

Author: thinkinglegal | Jul 17 2020 | Tags: Regulatory Advisory & Dispute Resolution

Introduction On July 3, 2020, the Securities and Exchange Board of India (“SEBI”) amended the SEBI (Investment Advisers) Regulations, 2013 (“Amendment”). The Amendment will be effective from September 30, 2020. The amendments include SEBI’s power to prescribe the fee structure for Investment Advisers, the requirements for Investment Ad...

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Stamp Duty on Units of VC/PE Funds

Author: thinkinglegal | Jul 03 2020 | Tags: PE / VC

VC/PE funds are typically registered as Alternative Investment Fund (“AIF”) in India. From July 1, 2020, funds have to pay stamp duty on the units issued to their investors/LPs. Funds are also required to appoint an agency for collection of the stamp duty before July 15, 2020. SEBI through its circular dated June 30, 2020 (“Circular”) ha...

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Protocol for Use of Aarogya Setu Data

Author: thinkinglegal | Jul 01 2020 | Tags: Data Protection & Privacy

On 11 May 2020, the Ministry of Electronics and Information Technology issued the Data Access and Knowledge Sharing Protocol (the “Protocol”) in order to ensure secure collection of data by the Aarogya Setu mobile application, protection of personal data of individuals, and the efficient use and sharing of personal and non-personal data for mit...

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MCA allows companies to hold AGM through VC or OAVM

Author: thinkinglegal | Jul 01 2020 | Tags: Corporate & Commercial

The Ministry of Corporate Affairs issued a General Circular No. 20/2020 on 05 May 2020 providing relaxations in the provisions of Companies Act, 2013 for conducting Annual General Meetings (“AGM”) for the calendar year 2020 on account of the threats posed by Covid-19. The process of holding AGMs through video conferencing or other audio visual ...

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CCI Invites Comments on Combination Regulations

Author: thinkinglegal | Jul 01 2020 | Tags: Regulatory Advisory & Dispute Resolution

Competition Commission of India (“CCI”) issued a Press Release inviting comments on the proposal to amend Form I of Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (“CCI Regulations”) to allow parties flexibility in determining non-compete restrictions, while al...

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Evidence for Establishing Connection Between Insiders

Author: thinkinglegal | Jul 01 2020 | Tags: Regulatory Advisory

Securities Exchange Board of India (“SEBI”) vide order dated May 29, 2020 decided on the liability of Mr. Sanjay Tayal, his brother Mr. Navin Tayal, his wife Ms. Jyoti Tayal, Ms. Jyoti’s brother Mr. Rohit Gupta, M/s Advik Textiles and Realpro Pvt. Ltd. (“Advik Textiles”) and the Directors of Advik Textiles in respect of insider trading in...

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High Court on Payment of Rent During Lockdown

Author: thinkinglegal | Jul 01 2020 | Tags: Regulatory Advisory & Dispute Resolution

On 21 May 2020, the Delhi High Court (“DHC”), in Ramanand & Ors. Vs. Dr. Girish Soni & Anr, dealt with whether COVID - 19 can be pleaded as a force majeure event to allow tenants to waive, defer or relax the payment of the rent.  Background: The appellants (“Tenants”) had taken a shoe store on lease in New Delhi. The lease d...

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Should Indian Startups Raise Funds through SAFE Notes?

Author: thinkinglegal | Jun 25 2020 | Tags: PE / VC, Startups

  Simple Agreement for Future Equity (“SAFE”) notes were introduced by Y Combinator in 2013. Since then, SAFE Notes have been used by startups raising seed funding. SAFE is an agreement between an investor and a company which gives a right to the investor to claim future equity in the company. The advantage of a SAFE note is that the va...

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SEBI Mandates Annual Audit of PPMs for PE / VC

Author: thinkinglegal | Jun 15 2020 | Tags: PE / VC

On February 5, 2020, India’s capital market regulator, the Securities and Exchange Board of India (“SEBI”) had issued a circular mandating that in order to ensure compliance with the terms of Private Placement Memorandum (“PPM”), it will be mandatory for Alternative Investment Funds (“AIFs”) to carry out an annual audit of compliance ...

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Startups: Incentivizing Employees Through Sweat Equity

Author: thinkinglegal | Jun 12 2020 | Tags: Startups

During the ongoing pandemic, startups have been looking to conserve cash, while ensuring that their employees are motivated and adequately compensated. Startups have been offering ESOPs, sweat equity, phantom stocks as well as other equity linked incentives to their employees. To provide flexibility to startups, the Ministry of Corporate Affairs...

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MCA allows companies to hold AGM through Video Conferencing

Author: thinkinglegal | May 27 2020 | Tags:

MCA allows companies to hold AGM through VC or OAVM The Ministry of Corporate Affairs (“MCA”), issued a General Circular No. 20/2020 (“Circular”) on 05 May 2020 giving clarifications for providing relaxations in the provisions of Companies Act, 2013 (“Act”) to allow companies for conducting Annual General Meetings (“AGM”) for the...

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SEBI's New Disclosure Requirements About Financial Impact of Covid-19

Author: thinkinglegal | May 22 2020 | Tags: Regulatory Advisory & Dispute Resolution

Background On May 20, 2020, SEBI issued an advisory (the “Circular”) on disclosure of material impact of Covid-19 pandemic on listed entities under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”). Despite the disruption caused due to lockdown being unforeseen, SEBI has emphasized that it is important for...

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FAQs on Telemedicine Practice Guideline

Author: thinkinglegal | May 07 2020 | Tags: Regulatory Advisory

On March 25, 2020, the Ministry of Health and Family Welfare, Government of India released the Telemedicine Practice Guideline (the “Guideline”). Telemedicine increases timely access to appropriate interventions including faster access and access to services that may not otherwise be available. The introduction of the Guideline is a timely inte...

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SC sets aside Ban on Cryptocurrency

Author: thinkinglegal | May 07 2020 | Tags: Regulatory Advisory

On 4 March 2020, the Supreme Court in the case of Internet and Mobile Association of India v. Reserve Bank of India set aside a controversial RBI Circular dated 6 April 2018 (“Circular”) prohibiting dealings in virtual currencies. RBI Circular The Circular did not prohibit the citizens from dealing in cryptocurrency expressly. The RBI imp...

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RBI issues Guidelines for Payment Aggregators

Author: thinkinglegal | May 07 2020 | Tags: Regulatory Advisory

On March 17, 2020, RBI issued Guidelines on Regulation of Payment Aggregators and Payment Gateways (“Guidelines”) that came into effect from April 1, 2020. In terms of the Guidelines, Payment Aggregators (“PA”) are entities that facilitate e-commerce sites and merchants to accept various payment instruments from the customers for complet...

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MCA Directive Discouraging Action Against Independent Directors

Author: thinkinglegal | May 07 2020 | Tags: General Corporate

The Ministry of Corporate Affairs has issued a Circular dated 02 March 2020 directing that unnecessary prosecution of Independent Directors (“ID”) and Non-Executive Directors (“NED") should not be undertaken. It has clarified that: the liability for offences committed by a Company is ordinarily attributable to whole –time directo...

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COPING WITH COVID – 19

Author: thinkinglegal | May 07 2020 | Tags: General Corporate

1. Extension for AIFs: SEBI has issued a Circular dated 30 March 2020 extending due date for regulatory filings for Alternative Investment Funds (“AIFs”) and Venture Capital Funds (“VCFs”) for the periods ending 31 March 2020 and 30 April 2020 by two months, over and above the timelines prescribed by SEBI (Alternative Investment Funds) Regu...

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Government Approval for FDI from Bordering Countries

Author: thinkinglegal | Apr 22 2020 | Tags: Mergers & Acquisitions, Private Equity

On April 17, 2020, the Department of Promotion for Industry and Internal Trade (“DPIIT”) issued Press Note 3 (2020) (“Press Note”) with the intention of curbing opportunistic takeovers/acquisitions of Indian companies due to current Covid-19 pandemic. On April 22, 2020, the Ministry of Finance issued a notification amend...

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Companies allowed to hold EGMs through VC or OAVM during Covid-19

Author: thinkinglegal | Apr 17 2020 | Tags: Regulatory Advisory and General Corporate

On 08 April 2020, the Ministry of Corporate Affairs (“MCA”), issued a General Circular No. 14/2020 giving a clarification on passing of ordinary and special resolutions by the companies under the Companies Act, 2013 (“Act”) on account of the threats posed by Covid-19. Later, on 13 April 2020, MCA issued a follow up clarification General Cir...

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Stewardship code aims greater investor, India Inc engagement. Will it work?

Author: thinkinglegal | Mar 17 2020 | Tags: Regulatory Advisory

This artcle first apeared in Business Standard. In 2014, seven domestic mutual funds came together to oppose Maruti Suzuki’s plans to set up a plant in Gujarat. In 2017, a bunch of institutional shareholders shot off a letter to Infosys seeking the return of co-founder Nandan Nilekani on the company’s board after the sudden resignation of ch...

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SEBI Mandate to Monitor ESG Risks & Opportunities

Author: thinkinglegal | Mar 13 2020 | Tags: Regulatory Advisory

The Securities and Exchange Board of India (“SEBI”), in its Stewardship Code effective from April 1, 2020, has mandated that institutional investors should monitor Environmental, Social and Governance (“ESG”) risks and opportunities. Globally, institutions and funds are keen to invest in companies that follow ESG principles. Many venture fu...

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E-Commerce Portals Not Responsible for Sellers’ Products

Author: thinkinglegal | Mar 13 2020 | Tags: Corporate Advisory

On January 31, 2020, the Delhi High Court set aside an earlier order restricting e-commerce portals such as Amazon and Snapdeal from selling the products of direct selling entities such as Amway, Modicare and Oriflame (“Direct Selling Entities”) on their respective platforms. In 2019, the Direct Selling Entities had alleged that their produc...

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Takeover Rules for Unlisted Companies

Author: thinkinglegal | Mar 13 2020 | Tags: Regulatory Advisory

On February 3, 2020, the Central Government notified the provisions for making a takeover offer as a compromise or an arrangement for unlisted companies under the Companies Act, 2013 (“Act”). The Central Government has further amended the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (“Rules”) to provide a procedure to...

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Proposed Amendments in the Competition Act to Cover Tech Cos

Author: thinkinglegal | Mar 13 2020 | Tags: Competition Law

On February 21, 2020, the Ministry of Corporate Affairs (“MCA”) had invited comments on the proposed Draft Competition (Amendment) Bill, 2020 (“Draft Bill”). Central Government to prescribe additional criteria for M&A deals: Currently, only deals above a particular value of assets or turnover are subject to scrutiny by the Compe...

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CCI Orders Investigation Against Amazon and Flipkart for Anti-Competitive Practices

Author: thinkinglegal | Feb 29 2020 | Tags: Competition Law

Competition Commission of India (“CCI”) has ordered an investigation into alleged violations under sections 3(1) and 3(4) of the Competition Act, 2002 (“Competition Act”) by Amazon and Flipkart in an order issued on 13 January 2020. Allegations Made By Delhi Vyapar Mahasangh: It was alleged that Flipkart and Amazon were abusing their dom...

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Budget2020: Boost to Start-Up Ecosystem

Author: thinkinglegal | Feb 29 2020 | Tags: Regulatory Advisory

In the Budget 2020, the Finance Minister highlighted the growth of entrepreneurial activities in the country and called start-ups as “engines of growth for our economy”. Government Funding: The government would provide seed and early stage funding to start-ups. ESOP Taxation Deferred: Recognising the need of attracting an...

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SEBI intends to strengthen the regulatory framework for Investment Advisers

Author: thinkinglegal | Feb 29 2020 | Tags: Regulatory Advisory

On 15 January 2020, SEBI issued a Consultation Paper on “Review of Regulatory Framework for Investment Advisers (“IA”)” inviting comments on various proposals including: 1. Cap on IAs fees: In order to curb the issue of mis-selling and overcharging of fees by IAs from clients in the capital market, SEBI has proposed that IAs should charg...

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Amendment to Master Direction on KYC

Author: thinkinglegal | Feb 29 2020 | Tags: Regulatory Advisory

On January 9, 2020, RBI amended the Master Direction on KYC dated February 25, 2016 (“Master Direction”) to include video based KYC and digital KYC. Digital KYC: In terms of this amendment, the customer due diligence can be completed through Digital KYC for the purpose of establishing an account-based relationship. Digital KYC means capturin...

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Suggestions on the Personal Data Protection Bill, 2019

Author: thinkinglegal | Feb 23 2020 | Tags: Data Protection

The Personal Data Protection Bill, 2019 (the “Bill”) has proposed some remarkable development in regards with data protection laws in India. In this piece, we discuss the changes that the Hon’ble Joint Parliamentary Committee on Personal Data Protection Bill could consider while deliberating on the Bill. Clause 12: Grounds for Processing D...

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Drones to be enlisted on the Digital Sky Platform by 31 January 2020

Author: thinkinglegal | Feb 15 2020 | Tags: Regulatory Advisory

The Ministry of Civil Aviation released a public notice on 13 January 2020 requesting the persons in possession of drones to inform the government of such possession. This was a one-time opportunity to make the voluntary disclosure of the drones so as to enlist them with the Digital Sky Platform, a website set up by the Directorate general of Civil...

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SEBI Introduces Greater Transparency in the AIF Space

Author: thinkinglegal | Feb 12 2020 | Tags: Regulatory Advisory

This artcle first apeared in IndiaCorpLaw. The Securities and Exchange Board of India (“SEBI”) has, through a Circular dated February 5, 2020 (“Circular”), issued disclosure standards for the growing Alternative Investment Funds (“AIFs”) space. The Circular was preceded by a Consultation Paper dated December 4, 2019. SEBI has introdu...

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Supreme Court intervenes in Mistry’s Mystery

Author: thinkinglegal | Feb 05 2020 | Tags: Corporate Advisory

On 18th December 2019, the National Company Law Appellate Tribunal (“NCLAT”) pronounced its judgment to reinstate Mr. Cyrus Pallonji Mistry as the chairman of Tata Sons Ltd. (“Company”) and reinstate him as the director of Tata Group Companies. Whether there was abuse of power by Tata Trusts in the matters of Tata Sons Ltd? It was hel...

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SC: Google Required to Remove Defamatory Content After Court Order

Author: thinkinglegal | Feb 05 2020 | Tags: Data Protection

Supreme Court of India in its judgment dated 10 December, 2019 issued landmark findings in respect of intermediaries’ liability in cases of hosting alleged defamatory content. Visaka Industries filed a defamation complaint against Ban Asbestos India for publication of an article titled “Visaka Asbestos Industries making gains”. The article...

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Key Takeaways from Budget 2020

Author: thinkinglegal | Feb 03 2020 | Tags: Regulatory Advisory

The key highlights of the budget for start-ups and other companies have been briefly explained below. Boost to the Start-up Ecosystem The FM highlighted the growth of entrepreneurial activities in the country and called start-ups as “engines of growth for our economy”. In lieu of the same, it was proposed that the government would pr...

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SEBI’s consultation paper to strengthen AIF Regulations

Author: thinkinglegal | Jan 29 2020 | Tags: Regulatory Advisory

On 4 December 2019, SEBI issued a Consultation Paper on “Introduction of Performance Benchmarking and Standardization of Private Placement Memorandum (“PPM”) for Alternative Investment Funds (“AIFs”)” inviting comments on proposals to introduce the following: Introduction of minimum benchmarks for disclosure of performance ...

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Highlights of the Personal Data Protection Bill

Author: thinkinglegal | Jan 18 2020 | Tags: Data Protection

The Personal Data Protection Bill (“Bill”) was tabled before the Lok Sabha on 11 December 2019 and is currently being analysed by the Joint Select Committee. The Bill regulates the processing of personal data of individuals (which are referred to as data principals) by government and private entities (which act as data fiduciaries) incorporated...

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Proposed Changes to Companies Act, 2013

Author: thinkinglegal | Dec 12 2019 | Tags: General Corporate

De-Criminalizing Offences by Directors On 19 November 2019, the Company Law Committee (the “Committee”) had submitted its report (“CLC Report”) to the Finance Minister and proposed to remove criminality in cases of default which can be determined objectively. It is reported that the government is in the process of introducing a...

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Consumer Protection (e-Commerce) Rules On the Anvil

Author: thinkinglegal | Dec 07 2019 | Tags: General Corporate

On November 11, 2019, the Ministry of Consumer Affairs issued the draft Consumer Protection (e-Commerce) Rules, 2019 (“Draft Rules”) that are proposed to apply to Companies conducting e-commerce business. The Draft Rules apply to e-commerce entities engaged in inventory based and marketplace model. Therefore, all e-commerce entit...

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A Comparison of Territorial Jurisdiction under India's Data Protection Bill & GDPR

Author: thinkinglegal | Nov 19 2019 | Tags: Data Protection

Introduction Data is widely hailed as the new fuel. The electronic processing of data has made data very valuable. However, the computerized processing of data has also led to increasing privacy concerns. In response to these concerns, the European Union had adopted the General Data Protection Regulation (“GDPR”) in May, 2018. The Indian gov...

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Government Relaxes FDI Norms For Single Brand Retail

Author: thinkinglegal | Sep 02 2019 | Tags: Regulatory Advisory

In recent years, FDI policy provisions have been progressively liberalized by the Central Government across various sectors to make India an attractive investment destination. On 29 August 2018, the Central Government notified additional investor friendly reforms for Foreign Direct Investment (FDI) Policy in various sectors, namely, single-brand re...

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Budget 2019: Incentives for Start-ups

Author: thinkinglegal | Jul 09 2019 | Tags: Start-Ups, Merger & Acquisition

The Finance Minister Nirmala Sitharaman presented the first budget for the second term of the Modi-led government on 05 July, 2019. The Budget 2019 outlines the government’s vision of a “$3 trillion economy in the current year”.The budget proposed a number of changes in the current scheme of affairs directed at growth and development of the ...

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SEBI Proposes Whistleblower Mechanism for Insider Trading

Author: thinkinglegal | Jun 11 2019 | Tags: Regulatory Advisory

Securities and Exchange Board of India (“SEBI”) on June 10, 2019 issued a discussion paper (“Discussion Paper”) on certain changes to be made to the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) to introduce a whistleblower mechanism for insider trading specifically. The Discussion Paper has suggested intro...

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SEBI Passes Unprecedented Orders against NSE in Co-location Matter

Author: thinkinglegal | May 02 2019 | Tags: Regulatory Advisory & Dispute Resolution

This artcle first apeared in Bar & Bench. Ms. Vaneesa Agrawal founder of Thinking Legal, discusses about the unprecedented orders by SEBI against NSE in Co-location Matter with Ms. Shereen Bhan of CNBC - TV18. The clip can be accessed by clicking on the image below. Background On April 30, 2019, SEBI passed five or...

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Latest Regulatory Challenge for Startups: E – Active Form

Author: thinkinglegal | Apr 23 2019 | Tags: General Corporate

[Please note that MCA by a notification dated 25 April 2019 has extended the deadline for filing the Active Form to 15 June 2019.] Impact on Startups Recently, Ministry of Corporate Affairs (“MCA”) has taken various steps to strike off dormant companies and to prevent fraud through shell companies in the economy. One such measure is to re...

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Supreme Court Quashes Controversial RBI circular on Debt Resolution

Author: thinkinglegal | Apr 11 2019 | Tags: Regulatory Advisory

On 2nd April 2019, the Supreme Court in the matter of Dharani Sugars and Chemical Ltd. vs Union of India &Ors.1, quashed the Reserve Bank of India’s (“RBI”) circular dated 12 February 2018 (“Circular”). Brief Facts In terms of the Circular, RBI directed banks and financial institutions to initiate resolution again...

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SEBI’s Insider Trading Regulations Get New Teeth

Author: thinkinglegal | Apr 11 2019 | Tags: Regulatory Advisory

This artcile first appeared in Financial Express https://bit.ly/2uYWKuM. Insider trading is trading on the basis of Unpublished Price Sensitive Information (UPSI) that is not generally available to everyone. Insider trading is prohibited since it allows certain individualswith access to UPSI to profit from information asymmetry. In recent t...

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Does the law allow Central Government to issue directions to RBI?

Author: Vaneesa Agrawal | Nov 15 2018 | Tags: Regulatory Advisory

This article first appeared in Financial Express https://bit.ly/2G4KGNF. A previously obscure provision of the Reserve Bank of India Act, 1934 has gained prominence in the past few days. As it has been widely reported, section 7 of the Act empowers the Central Government to issue directions to RBI. The use of this power has two safeguards. ...

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Sweat Equity - Can employees become stockholders?

Author: Rishi Ahuja | Oct 22 2018 | Tags: General Corporate

Having equity in a company is like having an ownership in the company. Sweat equity shares are the equity shares issued by the company only to their employees or directors for the hard work and sweat they put in for the company. In order to keep their employees motivated and involved, companies offer them ownership in the company by issuing them sw...

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Starting up? - Frequently Asked Questions

Author: Vasuvita Singh | Oct 22 2018 | Tags: Startups

A startup is a newly established business incorporated as a private limited company, sole proprietorship firm, registered partnership firm or a limited liability partnership (“LLP”). The distinguishing aspect of a startup is that it is engaged in developing new products or services through the use of innovation. In this article, we have answere...

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