Regstreet Law Advisors

𝗘𝗺𝗽𝗼𝘄𝗲𝗿𝗶𝗻𝗴 𝗙𝘂𝘁𝘂𝗿𝗲 𝗟𝗲𝗴𝗮𝗹 𝗠𝗶𝗻𝗱𝘀: 𝗜𝗻𝘁𝗲𝗿𝗻 𝗥𝗲𝗳𝗹𝗲𝗰𝘁𝗶𝗼𝗻𝘀 𝗮𝘁 𝗥𝗲𝗴𝘀𝘁𝗿𝗲𝗲𝘁 𝗟𝗮𝘄 𝗔𝗱𝘃𝗶𝘀𝗼𝗿𝘀  At Regstreet Law Advisors, we strive to provide interns with a transformative experience that equips them with essential skills and deep insights into financial regulatory law. We are excited to share reflections from our recent interns, who have made significant strides during their time with us. Vanshita Shah, a 5th-year B.L.S. LL.B. student from Government Law College, Mumbai; Nivedi Dutta, a 5th-year B.A. LL.B. student from Maharashtra National Law University Mumbai; and Vatsal Jain, a 4th-year B.A. LL.B. student from Hidayatullah National Law University, Raipur, have all thrived in our enriching and supportive environment. Their hands-on experience with regulatory frameworks, coupled with guidance from our senior team members and active participation in our comprehensive approach, has greatly enhanced their learning and development. We often receive positive feedback about our commitment to involving interns in client meetings, policy advisory, court / regulatory hearings and committee meetings whenever possible, which has proven to be an invaluable experience. We wish Vanshita, Nivedi, and Vatsal continued success in their legal careers. Your enthusiasm and eagerness to learn have been truly inspiring, and we look forward to witnessing the impact you will have in the field of law. Thank you for your hard work and meaningful contributions during your time with us! For those interested in applying for internships, they can reach out to us at internship@regstreetlaw.com. For career opportunities, contact us at careers@regstreetlaw.com.  #RegstreetLawAdvisors #Internship #LegalInterns #CareerGrowth #SecuritiesLaw #Mumbai #RegulatoryLaw #Law #Legal 

𝐒𝐄𝐁𝐈 𝐂𝐨𝐧𝐬𝐮𝐥𝐭𝐚𝐭𝐢𝐨𝐧 𝐏𝐚𝐩𝐞𝐫: 𝐏𝐫𝐨𝐩𝐨𝐬𝐞𝐝 𝐜𝐡𝐚𝐧𝐠𝐞𝐬 𝐭𝐨 𝐒𝐃𝐈 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧𝐬 SEBI (Issue and Listing of Securitized Debt Instruments and Security Receipts) Regulations, 2008 (SDI Regulations) deals with issuance, listing and trading of securitized debt instruments (SDIs) and of security receipts. SDIs in India are also governed by Reserve Bank of India (RBI) under its Master Direction - RBI (Securitization of Standard Assets) Directions, 2021 – for standard assets and the SARFAESI Act. Thus, SEBI proposes to amend these regulations by keeping the RBI’s master directions as the benchmark. A working group was constituted by SEBI which recommended several changes to the SDI regulations in its report. Significant changes suggested under the consultation paper includes: (a) Mode of issuance and transfer and minimum ticket size: SDIs to be issued and transferred only in demat form and the minimum ticket size for Non-RBI regulated originators would be INR 1 crore and for RBI regulated, the same would be as per RBI (currently ₹1 cr) (b) Number of Investors: Private placements limited to 200 investors; beyond that, a public issue is required. However, Qualified Institutional Buyers excluded from the 200-investor count. (c) Offer Period: Public offer would be open for minimum of 3 days and maximum of 10 days. (d) Minimum Risk Retention (MRR): MRR would be 10% (or 5% for short maturity receivables upto 24 months) (e) Changes to Definition of Debt/Receivables: Debt / Receivables would include listed debt securities, trade receivables (arising from bills/invoices duly accepted by the obligors), rental receivables and equipment leasing receivables. No other debt or receivable (including unlisted debt securities) shall be permitted to be an underlying for an SDI. (f) Amendments on Trustees (i) Trustee Composition: Only SEBI-registered Debenture Trustees can act as SPDE trustees. (ii) Trustee Removal: SEBI approval no longer required for trustee removal or replacement; aligned with NCS and MF Regulations. (iii) Trustee Duties: Amendments to enhance clarity, accountability, and transparency in trustee duties, per NCS and MF Regulations. (g) Amendments on Disclosure Requirements: Semi-annual updates mandated and continuous updates to stock exchanges by Debenture Trustees or CRAs for rating changes (h) Legislative Reference Revisions: References to concepts and provisions from Monopolies and Restrictive Trade Practices Act, 1969 & Companies Act, 1956 such as the term “group” or “under the same management” to be deleted since both these legislations have now been repealed. SDI Regulations to re-define these terms as per Competition Act 2002 or SAST Regulations .and/or associate company and/ or subsidiary. (i) Rights of investors in an SDI shall not be varied without their consent. A copy of the Consultation paper is attached. Readers are welcome to send their views to Regstreet Law Advisors at info@regstreetlaw.com.

𝐖𝐚𝐫𝐦 𝐃𝐢𝐰𝐚𝐥𝐢 𝐖𝐢𝐬𝐡𝐞𝐬 𝐭𝐨 𝐀𝐥𝐥! May the spirit of togetherness, love, and abundant blessings fill your life this Deepawali. As the festival of lights shines upon us, may your celebrations be bright with joy, prosperity, and unforgettable moments shared with loved ones. 𝐖𝐢𝐬𝐡𝐢𝐧𝐠 𝐲𝐨𝐮 𝐚 𝐣𝐨𝐲𝐟𝐮𝐥 𝐚𝐧𝐝 𝐩𝐫𝐨𝐬𝐩𝐞𝐫𝐨𝐮𝐬 𝐃𝐢𝐰𝐚𝐥𝐢! From all of us at the Regstreet Law Advisors to you and your dear ones. #Deepawali #Diwali #Festivity #Regstreetlaw #2024

𝐒𝐄𝐁𝐈 𝐂𝐢𝐫𝐜𝐮𝐥𝐚𝐫: 𝐌𝐚𝐫𝐤-𝐭𝐨-𝐌𝐚𝐫𝐤𝐞𝐭 𝐕𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧 𝐟𝐨𝐫 𝐒𝐡𝐨𝐫𝐭-𝐓𝐞𝐫𝐦 𝐑𝐞𝐩𝐨 𝐓𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐌𝐮𝐭𝐮𝐚𝐥 𝐅𝐮𝐧𝐝𝐬 SEBI has issued a draft of circular inviting public feedback on the proposed valuation methodology for mutual fund investments in repurchase (repo) transactions with a tenor of up to 30 days. This initiative seeks to establish consistency across all money market and debt instruments through a standardized mark-to-market (MTM) approach. 𝐁𝐚𝐜𝐤𝐠𝐫𝐨𝐮𝐧𝐝: (a) According to the existing provisions of Regulations 25(19) and 47, in conjunction with the Eighth Schedule of SEBI (Mutual Funds) Regulations, 1996, the norms for valuing investments made by Mutual Fund schemes are outlined in paragraph 9.6 of SEBI's Master Circular on Mutual Funds, issued on June 27, 2024 (“Master Circular”) which provides for the valuation of all investments by Mutual Funds in money market and debt securities to be carried out on a mark-to-market basis. However, these did not include securities which include repurchase transactions with tenor of upto 30 days. (b) Chapter 9 of the SEBI Master Circular, which specifies the provisions for valuation of investment in securities by Mutual Funds, inter alia mandate that money market and debt securities with residual maturity over 30 days shall be valued as per the prices obtained from the Association of Mutual Funds in India (AMFI) empanelled valuation agencies and the methodology specified therein. (c) Repurchase (repo) transactions, including tri-party repo (TREPS) with a tenor of up to 30 days, are allowed to be valued using a cost-plus-accrual method, also known as amortization-based valuation. 𝐏𝐫𝐨𝐩𝐨𝐬𝐞𝐝 𝐂𝐡𝐚𝐧𝐠𝐞 SEBI has proposed that mutual fund investments in repo transactions with tenors of up to 30 days adopt a mark-to-market (MTM) valuation approach. This adjustment is intended to address scenarios where issuer-specific events or adverse news might be more rapidly reflected in the MTM valuation of individual securities than in repo transactions, potentially creating unintended regulatory arbitrage. Applying MTM valuation to repo transactions of up to 30 days would thus harmonize valuation practices with those applied to other money market and debt instruments held by mutual funds. The Draft Circular is open for feedback until November 14, 2024. Readers are encouraged to provide their comments and suggestions to Regstreet Law Advisors at info@regstreetlaw.com. #SEBI #MutualFunds #RepoTransactions #InvestmentValuation #RegulatoryUpdate #SecuritiesLaw

𝐌𝐮𝐭𝐮𝐚𝐥 𝐅𝐮𝐧𝐝 𝐔𝐧𝐢𝐭𝐬 𝐈𝐧𝐜𝐥𝐮𝐝𝐞𝐝 𝐢𝐧 𝐒𝐄𝐁𝐈'𝐬 𝐈𝐧𝐬𝐢𝐝𝐞𝐫 𝐓𝐫𝐚𝐝𝐢𝐧𝐠 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧𝐬 Recently, SEBI issued a circular to streamline the implementation of the amendment to the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”), introduced on November 24, 2022. This amendment, which will come into effect from November 1, 2024, provides a framework for the prohibition of insider trading specifically in relation to units of mutual funds. SEBI had constituted a working group consisting of representatives from AMCs, AMFI, Stock Exchanges, RTAs and Depositories for suggesting effective implementation of the aforesaid amendment. 𝐊𝐞𝐲 𝐮𝐩𝐝𝐚𝐭𝐞𝐬 𝐮𝐧𝐝𝐞𝐫 𝐭𝐡𝐞 𝐜𝐢𝐫𝐜𝐮𝐥𝐚𝐫 1. 𝐐𝐮𝐚𝐫𝐭𝐞𝐫𝐥𝐲 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞: AMCs are required to disclose, under Regulation 5(E)(1) of PIT Regulations, the mutual fund unit holdings of their Designated Persons including trustees and immediate relatives starting from November 01, 2024. The first disclosure is due on November 15, 2024. For subsequent disclosures, the same have to be made within 10 calendar days from the end of the quarter Designated people shall be specified by the board of directors of the asset management company and trustees, in consultation with the compliance officer, in accordance with Regulation 5G. 2. 𝐓𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧 𝐑𝐞𝐩𝐨𝐫𝐭𝐢𝐧𝐠: Transactions in the units of an asset management company’s own mutual funds, exceeding INR 15 lakhs in value—whether in a single transaction or a series of transactions within any calendar quarter, per PAN across all schemes (excluding exempted schemes)—executed by Designated Persons of the asset management company, trustees, or their immediate relatives, must be reported to the Compliance Officer of the AMC within two business days from the date of the transaction, in terms of Regulation 5(E)(2) of the PIT Regulations. 3. 𝐔𝐩𝐝𝐚𝐭𝐞𝐬 𝐭𝐨 𝐭𝐡𝐞 𝐌𝐚𝐬𝐭𝐞𝐫 𝐂𝐢𝐫𝐜𝐮𝐥𝐚𝐫: To harmonize the framework of investment and trading restrictions on securities by employees of AMCs and Trustees, as provided under Clause 6.6 of the Master Circular for Mutual Funds dated June 27, 2024, with the amended PIT Regulations, Clause 6.6 of the Master Circular has been revised under this circular. These clarify the regulatory obligations for AMC employees and trustees regarding mutual fund units, ensuring they align with the updated PIT Regulations while specifying what transactions are covered under existing guidelines. A copy of the Circular is enclosed. Readers can provide their feedback to Regstreet Law Advisors at info@regstreetlaw.com. #SEBI #MutualFunds #InsiderTrading #Compliance #FinancialRegulations #Investment

𝐌𝐨𝐧𝐢𝐭𝐨𝐫𝐢𝐧𝐠 𝐎𝐟 𝐏𝐨𝐬𝐢𝐭𝐢𝐨𝐧 𝐋𝐢𝐦𝐢𝐭𝐬 𝐅𝐨𝐫 𝐈𝐧𝐝𝐞𝐱 𝐃𝐞𝐫𝐢𝐯𝐚𝐭𝐢𝐯𝐞 𝐒𝐞𝐠𝐦𝐞𝐧𝐭 SEBI on October 15, 2024, issued an important circular concerning position limits in the equity derivative segment. Based on inputs from market participants and discussions within SEBI’s Secondary Market Advisory Committee (SMAC), a key amendment has been made to position limits at the Trading Member (TM) level for index futures and options contracts. 𝐖𝐡𝐚𝐭’𝐬 𝐭𝐡𝐞 𝐀𝐦𝐞𝐧𝐝𝐦𝐞𝐧𝐭? Previously, position limits for TMs were set at the higher of INR 500 crores or 15% of total open interest (OI) in the market. However, the updated circular increases the position limits significantly. Now, TMs can hold positions up to INR 7,500 crore or 15% of total market OI, whichever is higher. These limits will apply separately to index futures and index options. SEBI has implemented a dynamic monitoring system for open interest positions, evaluating position limits based on the total open interest at the end of the previous trading day. Notably, in cases of passive breaches—where participants exceed limits due to a drop in market OI without changing their positions - no penalties or forced unwinding will be enforced. 𝐖𝐡𝐚𝐭 𝐢𝐬 𝐚𝐧 𝐎𝐈? It is the total number of active, unsettled contracts in a futures or options market. Increasing OI suggests a strengthening trend. 𝐄𝐟𝐟𝐞𝐜𝐭𝐢𝐯𝐞 𝐓𝐢𝐦𝐞𝐥𝐢𝐧𝐞: While the revised position limits take immediate effect, the provisions for passive breaches will be implemented from April 01, 2025. 𝐋𝐞𝐚𝐫𝐧𝐢𝐧𝐠 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐏𝐚𝐬𝐭: A similar change in the U.S. derivatives market. In 2020, the U.S. Commodity Futures Trading Commission (CFTC) expanded position limits on certain commodity contracts to allow greater flexibility for traders, especially during periods of market volatility. This was done to prevent forced unwinding of large positions when liquidity was tight, a situation that arose previosuly during the 2008 financial crisis when rigid position limits exacerbated the market downturn. In India, a relatable case that could be relevant here is the 2013, National Spot Exchange Limited (NSEL) crisis. During the fallout, several brokers had positions exceeding limits, which led to forced liquidations and contributed to market panic. SEBI's introduction of passive breaches could help prevent similar market disruptions by providing flexibility in dynamic market conditions. This circular marks another step by SEBI to promote transparency, fairness, and stability in the Indian derivatives market. Stay informed with Regstreet Law Advisors as we continue to monitor and provide insights into the evolving landscape of financial regulations. Any comments or feedback is welcome at info@regstreetlaw.com #SEBI #RegstreetLaw #TradingLimits #MarketRegulation #SecuritiesLaw #lawstudent #lawfirm

𝐒𝐄𝐁𝐈’𝐬 𝐦𝐨𝐧𝐢𝐭𝐨𝐫𝐢𝐧𝐠 𝐨𝐟 𝐌𝐚𝐫𝐤𝐞𝐭 𝐈𝐧𝐟𝐫𝐚𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞 𝐈𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐢𝐨𝐧𝐬 (𝐌𝐈𝐈𝐬) – 𝐒𝐭𝐨𝐜𝐤 𝐄𝐱𝐜𝐡𝐚𝐧𝐠𝐞𝐬, 𝐂𝐥𝐞𝐚𝐫𝐢𝐧𝐠 𝐂𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐢𝐨𝐧𝐬 𝐚𝐧𝐝 𝐃𝐞𝐩𝐨𝐬𝐢𝐭𝐨𝐫𝐢𝐞𝐬 SEBI has released a new circular outlining enhanced procedures for monitoring shareholding limits, public shareholding requirements, and the ‘fit and proper criteria’ in both listed and unlisted MIIs requiring them to disclose their shareholding pattern. The key highlights of the said circular are as under: 1.      𝐃𝐞𝐬𝐢𝐠𝐧𝐚𝐭𝐞𝐝 𝐃𝐞𝐩𝐨𝐬𝐢𝐭𝐨𝐫𝐲: MIIs must adhere to shareholding norms and fit & proper criteria. Each MII must appoint a Designated Depository (“DD”) to monitor shareholding limits. All shareholders with 2% or more equity must meet fit and proper criteria. A non-associated depository will act as the DD, monitoring thresholds of 5%, 15%, 45%, or 49% under SECC Regulations, 2018 and D&P Regulations, 2018. 2.      𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 𝐫𝐞𝐪𝐮𝐢𝐫𝐞𝐦𝐞𝐧𝐭𝐬: Quarterly disclosure of shareholding patterns on their respective websites is mandatory. 3.      𝐌𝐨𝐧𝐢𝐭𝐨𝐫𝐢𝐧𝐠 𝐫𝐞𝐬𝐩𝐨𝐧𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬 𝐚𝐧𝐝 𝐜𝐨𝐧𝐬𝐞𝐪𝐮𝐞𝐧𝐜𝐞𝐬: DDs will alert MIIs and exchanges about breach of thresholds. In case of breach, the DD will freeze excess shares, disable voting rights, and transfer dividends from excess holdings to the Investor Protection Fund (IPF) or Settlement Guarantee Fund (SGF). 4.      𝐈𝐦𝐩𝐥𝐞𝐦𝐞𝐧𝐭𝐚𝐭𝐢𝐨𝐧 𝐭𝐢𝐦𝐞𝐥𝐢𝐧𝐞: The circular will take effect on 12 January 2025 i.e., after 90 days. This measure is aimed at enhancing transparency and to identify the beneficial owners of securities in MIIs (BSEIndia, NSE India, Multi Commodity Exchange of India, CDSL - Central Depository Services India Ltd, National Securities Depository Limited (NSDL), MCX, NSCCL nsccl. The securities law participants can find interesting conflicts between the provisions of the Companies Act, 2013 and powers of SEBI, limits of delegation, established constitutional precedents and judicial precedents from academic and practitioners’ perspectives. What is intriguing is the rationale of providing these far-reaching amendments through a mere circular rather than amendments to the regulations itself. Mr. Sumit Agrawal (Regstreet Law Advisors) and Mr. M. S. Sahoo had written in the past about misuse of circulars as disguised legislation, available at: https://lnkd.in/gqz-MFpx. Readers can provide their feedback at info@regstreetlaw.com. #SEBI #Compliance #MIIs #securitieslaw #regstreet #lawstudents #lawfirms

𝐖𝐢𝐬𝐡𝐢𝐧𝐠 𝐘𝐨𝐮 𝐚 𝐉𝐨𝐲𝐟𝐮𝐥 𝐃𝐮𝐬𝐬𝐡𝐞𝐫𝐚! As we celebrate Dusshera, the festival that marks the triumph of good over evil, we reflect on the values of integrity, resilience, and fairness that resonate with this special day. May this Dusshera bring peace, prosperity, and happiness to you and your loved ones. Happy Dusshera from all of us at Regstreet Law Advisors! #Dusshera #FestivalOfGoodness #RegstreetLawAdvisors #FestiveGreetings

𝐈𝐬 𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐚𝐛𝐨𝐮𝐭 𝐒𝐭𝐨𝐜𝐤 𝐒𝐩𝐥𝐢𝐭 𝐂𝐨𝐧𝐬𝐢𝐝𝐞𝐫𝐞𝐝 𝐚𝐬 𝐔𝐏𝐒𝐈? Recently, in the case of Affluence Fincon Service Pvt. Ltd. v SEBI, the Hon’ble SAT addressed whether information about a company's stock split qualifies as Unpublished Price Sensitive Information (UPSI). Facts: One Dhiren Shah Group invested ₹49.99 crore in preferential shares of Infibeam Avenues Limited (IAL), part of the Mehta Group, prior to its listing. They also provided share-broking services to Infinium Motors (IMGPL), another Mehta Group company. SEBI investigated potential insider trading related to IAL and concluded that the Dhiren Shah Group had access to UPSI regarding a stock split discussed in a board meeting on 24.06.2017. SEBI asserted that UPSI began on 22.11.2016, when the CFO presented the concept of a stock split. Based on the above, SEBI issued an interim order asserting that the Dhiren Shah Group entities had connections to the promoters and directors of IAL, allowing them to access UPSI while trading, resulting in unlawful gains of ₹2.61 crore. This interim order was subsequently set aside by SAT and directed appellants to file reply before SEBI. After further hearings, SEBI passed the impugned order. 𝐊𝐞𝐲 𝐈𝐬𝐬𝐮𝐞𝐬: Whether information about the stock split constituted UPSI and when UPSI commenced. The appellants argued that information about stock split should not be considered UPSI since: (a) No money was raised nor assets acquired or was there any change in capital structure through stock split and only the Face Value of existing shares was sub-divided. (b) The announcement had minimal impact on IAL's share price, which rose by only 1.46% on BSEIndia and 1.25% on NSE India, with trading volumes fluctuating moderately. 𝐅𝐢𝐧𝐝𝐢𝐧𝐠𝐬: 1. The tribunal held that stock splits are price-sensitive as they require shareholder approval (under Section 61 of the Companies Act, 2013) and can affect stock liquidity and market prices. 2. A stock split increases accessibility by lowering the share's face value, potentially raising demand and liquidity, which can influence price trends. 3. The likelihood of the information affecting the price is more relevant than the actual price change itself. 4. SAT noted that the 22.11.2016 meeting only provided a general overview of stock splits, without specific reference to IAL’s securities. 5. SAT ruled that an undefined relationship between the company and preferential allottees cannot be considered a "connection" under Regulation 2(1)(d). Readers are welcome to share their views to Regstreet Law Advisors at info@regstreetlaw.com. #SAT #sebi #insider #order #regstreet #securitieslaw

It is with immense respect and gratitude that we mourn the passing of 𝐌𝐫. 𝐑𝐚𝐭𝐚𝐧 𝐍𝐚𝐯𝐚𝐥 𝐓𝐚𝐭𝐚, a true legend in Indian industry, philanthropy, and leadership. His visionary approach, combined with his unwavering commitment to integrity, innovation, and social responsibility, has shaped not only the business landscape but also the lives of millions. Mr. Tata's unparalleled contributions and compassionate leadership will continue to inspire future generations. His legacy of humility, service, and excellence will forever guide us in the pursuit of progress and ethical governance. As we reflect on his extraordinary life and lasting impact, we extend our heartfelt condolences to his family, friends, and everyone whose lives he enriched. His legacy will live on in our hearts, a shining beacon of hope and inspiration. May his soul rest in peace!