insider trading regulations

Testing the Frontiers of the Insider Trading Regulations

By an order issued on January 14, 2022, the United States District Court, Northern District of California allowed the Securities Exchange Commission (“SEC”) to proceed on the misappropriation theory of insider trading in its “shadow trading” complaint against Matthew Panuwat. The SEC had alleged that Panuwat used confidential information about the acquisition of his employer, Medivation, to buy options in another publicly traded company and Medivation’s peer, Incyte. This note discusses the circumstances in which trading in securities of a company while in possession of information related to another company may be considered a violation of the Indian Insider Trading Regulations.


Private Equity in Sports Franchises in India

With the recent expansion of the IPL to include two new teams, CVC Capital Partners, a leading international private equity firm, acquired the Ahmedabad franchise – this is the first instance of a significant private equity investment in professional sports in India. We discuss the opportunities and potential challenges that lie ahead for private equity investment in sports franchises in the attached note.


data centers in india

Legal Considerations for Investments in Data Centres in India

With the continuing focus on digitisation accelerated by Covid lockdowns and rising demand for sustainability and green goals, there is an increase in activity relating to data centres for operators and investors as well as policymakers and regulators. In order to attract investment in data centres in India with a vision “to make India a global data centre hub”, the new Government policies intend to provide various incentives and exemptions to promote data centre industry growth. In the recent past, several multinational and domestic companies have set up data centres in India. Given the focus on data localization, there appears to be significant potential for growth for the data centres industry. In this background, the Government’s move to grant ‘infrastructure’ status to data centres and introduce a national data centre policy are welcome measures which will promote investments in data centres in India. In addition, two other policy initiatives announced in the budget speech which are expected to incentivize data centre investments are the 5G spectrum auction and the widening footprint of optical fibre.


Related Party Transactions

Recent Changes to Framework Governing Related Party Transactions involving Listed Entities

On September 28, 2021, the Securities and Exchange Board of India (the “SEBI”) approved certain changes to regulations governing related party transactions involving listed entities under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”). The changes were announced in a press release dated September 28, 2021. Subsequently, the SEBI amended the Listing Regulations on November 9, 2021 (the “Amendment Regulations”). This note sets out an overview of the amendments introduced by the Amendment Regulations, most of which will take effect from April 1, 2022, with certain provisions taking effect from April 1, 2023. While these amendments will require increased monitoring and compliance by listed entities, clarifications have also been provided to ease compliance. Overall, these amendments are expected to strengthen oversight of related party transactions involving listed entities in India.


Data Protection and Competition Law: Developments and the Way Forward

In the last decade the digital sector has witnessed tremendous growth – while this has given rise to new business models, opened up new markets, and unlocked significant efficiencies, it has also raised concerns that tech giants may use the excessive amounts of user data they hold, to influence digital markets to their advantage. However, there are also apprehensions regarding the use of competition law (instead of privacy and consumer legislations) to address such concerns. This note provides a brief overview of the existing legal framework on data privacy in India, analyses the CCI’s decisional practice in this regard, and suggests an appropriate way forward for the CCI on this matter.


Karnataka High Court’s Dismissal of Amazon and Flipkart’s Petitions – An Opportunity Missed?

The Karnataka High Court has, on 11 June 2021, dismissed the writ petitions filed by Amazon and Flipkart challenging the Competition Commission of India’s order issued under Section 26(1) of the Competition Act, 2002, directing the Director General to investigate certain alleged anti-competitive practices. While the Karnataka High Court’s judgment appears to follow well-established legal principles laid down by the Supreme Court of India, a closer examination reveals that some of the key arguments raised by Amazon and Flipkart have only been given a cursory consideration by the Karnataka High Court. Amazon and Flipkart have preferred an appeal against this judgment before a division bench of the Karnataka High Court.  This note analyzes the judgment passed by the single judge bench of the Karnataka High Court.


FDI in India

Impact of COVID-19 on FDI Regimes – One Year Later

In a significant move more than a year ago, the Indian Government directed that all investments from countries that share land borders with India will require prior regulatory approval. This change covered both direct and indirect investments and came in the wake of scrutiny by the Indian securities regulator of Chinese ownership of portfolio investors and the introduction of stricter FDI regimes worldwide. It may be time for the Government to consider whether the rules introduced in 2020 are justified any more in their current form. If not, certain modifications could be considere


FDI in India

Treatment of ‘Inter-Connected’ Transactions under Indian Competition Law

Under the Competition Act, 2002, transactions that qualify as a ‘combination’, are required to be notified to, and approved by, the Competition Commission of India (the “CCI”) prior to completion, unless any exemptions apply. If addition, all transactions that are ‘inter-connected’ with such ‘combination’, are also required to be notified to the CCI in a single application along with the combination. This applies irrespective of the inter-connected transaction being exempt from notification requirement on a standalone basis, and the inter-connected transaction may not be completed prior to receipt of the CCI’s approval. However, the identification and treatment of such ‘inter-connected’ transactions is fraught with uncertainty. This note aims to provide an overview of the existing Indian merger control framework and identify certain issues often faced by stakeholders in this regard.


Sharing of Unpublished Price Sensitive Information on WhatsApp and “Innocent Tippee” Liability

In 2020, a set of orders were issued by the SEBI in which the SEBI imposed penalties on certain individuals for forwarding WhatsApp messages with details of companies’ earnings ahead of formal announcements. These individuals received such messages on WhatsApp groups that they were a part of, and forwarded such messages as they had received them. The SEBI refused to accept the defense that the information shared was simply market chatter that was “heard on the street” and was not unpublished price sensitive information (“UPSI”). The SEBI’s orders were recently overruled by the Securities Appellate Tribunal (“SAT”). The SAT ruled that information could be considered UPSI only when a person in receipt of such information had knowledge that it was UPSI.


Regulating Big Data: Contextualising CCI Probe into WhatsApp’s Privacy Policy

The CCI’s recent order directing an investigation into WhatsApp’s privacy policy provides us with the opportunity to look at how competition regulators, both in India and abroad, have sought to regulate data collection and sharing. There are multiple concerns to be balanced in this process – the ability of businesses with large data sets to better serve customers, entry barriers to new business with access to comparatively smaller data sets, and increased consumer dependency on a limited set of players. The CCI’s recent order could be indicative of its recognition of these concerns and its intention to take a more interventionist approach where it believes that user data is being exploited in a manner that creates entry barriers or otherwise adversely impacts competition or consumers’ interests.