The Rights of the Deceased: Moral Rights Incidental to Copyright Law
- Vanshika Agrawal
- 2024-04-25
Contents hide
Securities Laws- The prosperity of securities market is a critical indicator of a healthy economy or quintessential for a growth and development. In India, securities have been traded for more than two centuries now, though historical evidence regarding initial stages of securities market is meager and obscure. This note attempts to trace the evolution of securities law in India. Firstly, the notes trace the circumstances around the securities market in pre independence era and the consequential developments. Secondly, the post-independence, development particularly pertaining to the enactment of legislations to regulate securities market and protect investor’s rights. Thirdly, I have dealt with the amendment in post liberalization phase which saw a paradigm shift in securities market in every aspect. It was during this phase The Securities and
Exchange Board of India was constituted with the enactment of SEBI Act, 1992.
Though the historical knowledge relating to securities markets in India is very obscure, it was during the end of 18th century, that loan securities of East India Company were traded. By 1830’s, the trading in shares of banks started.[1] This trend of trading in loan securities and bank shares continued till 1850, under a Banyan Tree in front of the Town Hall. In 1850, with the enactment of first Joint Stock Company act, which enunciated the concept of limited liability, further propelled the trading volumes. In 1861, due to the American Civil War, the demand for cotton from India usurped, which
eventually lead to establishment of in numerous new ventures.
Between 1863 and 1865, the new ventures raised nearly Rs.30 crore in the form of paid up capital and nearly Rs. 38 crore of the premia. [2] The end of civil war and the depression disrupted the securities market and paved the way for a formal market system. The number of traders eventually settled at Dalal Street and formed an informal organisation as “Native Shares or Stock Brokers Association” which eventually came to be known as Bombay Stock Exchange which was formally recognised by the government in 1965 under SCRA, 1956. Ahemdabad Stock Exchange was established in 1874, trading in shares of textile mills. To settle the disputes which had arose due to rise and fall in prices of jute, tea and coal, and
further trade in their shares, Calcutta Stock Exchange was established in 1908.
The government of India to channelize capital to support war, issued Control of Capital through the Defence of India Rules in 1943 under the Defence of India Act, 1939 to route the capital, which were eventually replaced by the Capital Issues (Continuance of Control) Act in April 1947. The laxity in regulation of association, pointed by the Atlay Committee coupled with the June 1925
crash paved way for Bombay Securities Contracts Control Act, 1925. But the legislation proved to deficient and there were crisis in 1928,1930,1933,1935,1936 which led to formulation of Morrison Committee and
addition of new regulations to the existing regulations in 1938. With the Constitution of India, coming into force, the securities and
forward market fell into the exclusive domain of central government.
The government formulated A.D Gorwala inn 1951, to recommend on a suitable legislation for regulating stock exchanges and securities contracts. Following the recommendations of the Committee, the SCRA was enacted in 1956 to provide for direct and indirect control of virtually all aspects of securities trading and the running of stock exchanges and to prevent undesirable transactions in securities. [3] The act inter-alia vested power in central government to regulate stock exchanges, contracts in securities and listing of securities. It is noteworthy here that prior to the enactment of SEBI Act, 1992 , these power were vested exclusively with central government
but now both the central government and
SEBI enjoy concurrent jurisdiction.
The period of after 1990 was mark by drastic changes in securities market due to myriad factors ranging from liberalization, influx of global investment, technological advancement and the scams. The era of legal reforms began with the enactment of SEBI Act, 1992, and establishment of SEBI as the market regulator. The act intended to protect investor’s interests and regulate securities market. This was follow by Securities Law (amendment ) Act, 1995 which extended SEBI’s jurisdiction over corporates in the issuance of capital and
transfer of securities, empowered SEBI to appoint adjudicating officers to
adjudicate wide range of violations and impose monetary penalties and
provided for establishment of Securities Appellate Tribunals (SATs) to hear appeals against the orders of the adjudicating officers.[4]
The Depositaries Act, 1996 was enact to establish depositaries to store ownership information in book entry form. This was intend to overcome the hurdle of paper base dealing and transfer of securities which cause delay in transfers and
settlement of securities. The act ensured free transferability of securities of public limited companies subject
to certain exceptions anddematerialized the securities in depository mode.
The Government Securities Act, 2006 regulates issue of government securities. The RBI is authorise to issue directions, make inspections of any person or agent dealing in government securities laws and
impose monetary penalties in case of violations of provisions of the act. It further confers on RBI the power to regulate issuance of government securities.
The Scams, like Sharda and Sahara further ambushed the government to take concentrated efforts to enhance investor protection. Eventually the government of India promulgated Securities Laws (Amendment) Ordinance, 2013, which drastically changed the security law framework in India. The ordinance inter-alia amended the SEBI Act, 1992 to establish special courts and offences triable by them, conferred power on SEBI chairman to authorize search and
seizure if books and
registers are apprehend to be altere or mutilate.[5]
The new Companies Act, 2013 introduced the new feature of class action law suit against corporate fraud and
claim damages in case misrepresentation and omission. The act further ensures representation of minority shareholder on board and
provides dissenting shareholder an option to exit in lieu of price determine by SEBI if the objects are change.
There are catena of other legislation and regulations like SEBI (Prohibition of Insider Trading) Regulations, 1992, SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 (“Takeover Code”) etc. aimed
at promoting ethical trading, combating unfair and manipulative practices and most importantly protecting investors interest.
With India on ladder, towards a global economy, increased investment in securities market, securities laws influx of foreign institutional and portfolio investment is inevitable. The present combating regimes, no doubt has proved to be inadequate on certain occasion but it must be remember the crash and
scams in securities market is a global phenomenon and even the most developed legal systems have caught fire now and then. No single legislation can promise a scam free security market so the focus must be more on developing mechanism
to grab defaulters before they commit the so called white collar crime. The recent attempt by SEBI to strength the vigil mechanism is an initiative in such direction. The shift in SEBI landscape over the past couple decades form just be a paper tiger
to being a market regulator has further strengthened the security law regime in India.
[1]Speech by Shri G.N. Bajpai,A Historical Perspectives of Securities Market Reforms, SEBI (Jan 10, 2021 5:16 p.m.) https://www.sebi.gov.in/media/speeches/mar-2004/a-historical-perspective-of-the-securities-market-reforms_2882.html
[2]Id.
[3] M.S. Sahoo, Historical Perspectives of Securities Laws, ICSI (Jan 10, 2021, 3:07 p.m.) https://www.icsi.edu/docs/webmodules/Programmes/31NC/HISTORICALPERSPECTIVEOFSECURITIESLAWS-MSSAHOO.doc/
[4]Id.
[5]AmritSubhadarsi and Basabjit Banerjee, Indian Securities Laws Market in the light of Regulators, 2015 1 MLJ 5.
Drop your comment