The Legal 500

Soon after the rollback of the much criticized aspect of the Consolidated Foreign Direct Investment policy dated October 1, 2011 which treated foreign investments in Indian securities as external commercial borrowings in case such investments conferred options on the foreign investors, the policy makers have brought more good news for the investor community.

The Government of India has over the years been encouraging Foreign Direct Investment (FDI) by liberalizing its foreign investment policy and procedures to achieve economic development. Recently, a consolidated new FDI Policy has come into force with effect from 1st April, 2010 to be superseded by new circular to be issued on 30th September, 2010 and would be replaced every 6 months by including the changes effected during the said period. The consolidated circular has rescinded all earlier Press notes issued.

SEBI notified that for opening beneficial owner’s account by a Depository Participant (“DP”) ‘in person’ verification of clients has to be done mandatorily by DP.  It is further clarified that such ‘in person’ verification done for opening beneficial account by a DP, will hold good for opening trading account by a stock broker and vice versa if the stock brokers and DP is the same entity or if any of them is the holding or subsidiary company of the other.

SEBI Informal Guidance on the Applicability of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997

The facts before the SEBI for informal guidance were as follows:

A company had set up an Employees Welfare Trust ("Trust") which has the power to invest its surplus funds into the market in buying various securities, including securities of the company. The invested money will be invested in the name of the trustees and will be used for the benefit of the beneficiaries of the Trust. However, no person who is a member of the promoter group of the company or a director or key management personnel of the company or is a relative of any of these persons can become a trustee. Further if a trustee takes up any of these positions or is a relative of a person in any of these positions, then he would need to resign from the trusteeship of the said Trust. 

Interim Budget 2009-10

1. Highlights of the Budget 1.1 Total expenditure for fiscal year 2009-10 estimated at INR 9,532.31 billion. Plan expenditure estimated at INR 2,851.49 billion and Non-Plan expenditure at INR 668.08 billion. 1.2  Budgetary support in Plan Budget Estimate (“B.E.”) 2009-10 in comparison to B.E. 2008-09 increase for Department of Rural Development, Department of Road Transport & Highways Railways, Ministry of Power, Department of Industrial Policy and Promotion an Department of Information Technology to meet the requirements of rural and infrastructure development along with higher allocation for Ministry of Youth Affairs & Sports and Ministry of Culture to ensure adequate resources for hosting of the Commonwealth Games. Allocations to flagship programme which directly impact ‘Aam Aadmi’ fully protected.

Certain important and recent case laws in this area are set out below

Shobika Attire Vs New India Assurance Co. Ltd[ JT 2006 (12) SC 98]

The appellant insured its stock with the respondent. Due to communal riots the insured stocks that were lying in the show room were destroyed. When the claim was made, the respondent settled the claim for lesser amount and rejected the claim of loss of goods lying in the basement.

Certain important and recent enactments, legal developments and case laws in this area are set out below.

The Actuaries Act, 2006

The insurance sector was liberalized in the year 1999, with the enactment of the Insurance Regulatory and Development Authority Act, 1999, which enabled private players to participate in insurance business.

Certain important and recent enactments, legal developments and case laws in this area are set out below.

The Reserve Bank of India (Amendment) Act, 2006

The Reserve Bank of India (Amendment) Act, 2006 has been notified with effect from June 12, 2006. The legislation seeks to enable Reserve Bank of India (‘RBI') to determine the Cash Reserve Ratio (CRR) for scheduled banks without any floor of ceiling to cope with any unforeseen eventualities, such as excess or lack of liquidity in the banking system and for the effective conduct of monetary policy.

Certain important and recent development in this area is set out below.

Certain important and recent development in this area is set out below.

Certain important and recent development in this area is set out below.