On July 28, 2011, the Securities and Exchange Board of India ("SEBI") proposed new Takeover Regulations based on recommendations of the Takeover Regulations Advisory Committee ("TRAC"). While a takeover code in India has been in place since 1997 (revised and amended from time to time), SEBI constituted the TRAC in September 2009 to review the existing regulations and make them more relevant for present day transactions. While TRAC submitted its report in 2010, SEBI proposed the new Takeover Regulations subsequent to its internal deliberations. The major changes to the existing Takeover Regulations, inter alia, include:
Securities Regulation
2011 Mid-Year Securities Litigation Update
In the first half of 2011, the United States Supreme Court decided a trio of securities class action cases, and what may be the most significant class certification decision in several decades; new case filings continue to trend upward; and major “credit crisis” cases are beginning to be resolved
The SEC Finalizes Its Private Fund Adviser Registration Rules and Related Exemptions
On June 22, 2011, the Securities and Exchange Commission (the “SEC” or the “Commission”) voted to adopt final rules[1] to implement amendments to the Investment Advisers Act of 1940 (the “Advisers Act”) contained in Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).[2]
2011 Mid-Year Securities Enforcement Update
I. Overview of the First Half of 2011
Robert Khuzami, the Director of the Division of Enforcement (the “Division”) of the SEC, recently took stock of the SEC’s accomplishments in the two years since he began his term. Specifically, he focused on the Division’s restructuring, calling it the “most significant” since the Division’s creation almost 40 years ago.[1] In describing the restructuring, he noted that it was composed of many initiatives that were intended to achieve a series of common goals including: achieving a better understanding of the products, markets, transactions and practices policed by the Commission; identifying and terminating fraud and misconduct more quickly; increasing efficiency in the use of resources; and maximizing the Division’s deterrent impact by swiftly addressing threats as they develop and before they can permeate entire business lines or industries.[2]
With One Month to Spare, the SEC Will Consider Final Private Fund Adviser Registration Rules
On June 22, the SEC will meet to consider adopting final rules and rule amendments to implement the requirements of Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Commission’s press release is available at http://sec.gov/news/openmeetings/2011/ssamtg062211.htm.
Directors and Shareholders of Indian Companies are Permitted to Attend Board Meetings and Shareholder Meetings via Video Conference
On May 20, 2011, the Ministry of Corporate Affairs, Government of India ("Corporate Affairs Ministry"), issued two general circulars ("Circulars") permitting attendance of meetings of the Board of Directors ("Board") and general meetings of the shareholders of an Indian company by using an electronic mode of communication. The Circulars were issued by the Corporate Affairs Ministry as part of its "green initiative in corporate governance" and are a long-awaited change to the means of attending Board and shareholder meetings. The first circular[1] ("Circular 1") clarified that shareholders of an Indian company can participate in general meetings of the shareholders by using video conferencing facilities. The second circular[2] ("Circular 2") clarified that directors of an Indian company can participate in meetings of the Board using video conferencing facilities and also clarified that directors who participate via video conferencing facilities will be counted towards the quorum of such Board meetings.
The Securities and Exchange Board of India Takes the View that Put/Call Options and Rights of First Refusal are Unenforceable
In an unpublished letter dated March 18, 2011, the Securities and Exchange Board of India ("SEBI") has taken the view that put and call option arrangements and rights of first refusal are not enforceable in India. Although the law on this question is far from settled, the view taken by SEBI may potentially impact several public M&A transactions in India where such clauses are frequently included in transaction documents. Please note that this discussion is based on an unpublished letter and that the analysis should therefore not be taken to be final law on the subject.
The Government of India Issues a New Consolidated Foreign Direct Investment Circular
On March 31, 2011, the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India ("DIPP"), issued a new consolidated foreign direct investment policy, Circular 1 of 2011 ("Circular"), which supersedes all prior press notes, press releases and clarifications issued by the DIPP relating to foreign direct investment in India. The Circular reflects the current policy of the Indian Government with respect to foreign direct investment in India, and has the force of law.
Budget Impasse May Lead to SEC Shutdown
UPDATE: On Friday, April 8, 2011, the SEC published its contingency Plan of Operations on its federal government shutdown page in preparation of a federal government shutdown due to the budget impasse. All updates and announcements regarding SEC operations during the potential shutdown will be posted on the same page. Gibson Dunn’s client alert originally distributed on April 6 follows below. On Tuesday, April 5, 2011, the Obama administration and Congressional leaders announced that they had failed to reach a budget agreement, which could lead to a partial shutdown of the federal government if no budget bill or continuing resolution is approved by the close of business on Friday, April 8, 2011. The U.S. Securities and Exchange Commission (“SEC”) is likely to be significantly affected by any shutdown due to the budget impasse.
Social Media and the Federal Securities Laws
New York partner Lois Herzeca is the author of "Social Media and the Federal Securities Laws" [PDF] published in the April 4, 2011 issue of BNA’s Securities Regulation & Law Report.