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๐ƒ๐ข๐ ๐๐Œ ๐Œ๐จ๐๐ข ๐š๐ง๐ ๐€๐ฆ๐ข๐ญ ๐’๐ก๐š๐ก ๐›๐ซ๐ž๐š๐ค ๐š๐ง๐ฒ ๐’๐ž๐›๐ข ๐ซ๐ฎ๐ฅ๐ž ๐›๐ฒ ๐ฉ๐ซ๐ž๐๐ข๐œ๐ญ๐ข๐ง๐  ๐ฌ๐ญ๐จ๐œ๐ค ๐ฆ๐š๐ซ๐ค๐ž๐ญ ๐ซ๐š๐ฅ๐ฅ๐ฒ ๐š๐Ÿ๐ญ๐ž๐ซ ๐ž๐ฅ๐ž๐œ๐ญ๐ข๐จ๐ง๐ฌ?

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The Economic Times Times recently published an article examining whether ๐‘ท๐’“๐’Š๐’Ž๐’† ๐‘ด๐’Š๐’๐’Š๐’”๐’•๐’†๐’“ ๐’๐’‡ ๐‘ฐ๐’๐’…๐’Š๐’‚ Narendra Modi and ๐‚๐š๐›๐ข๐ง๐ž๐ญ ๐Œ๐ข๐ง๐ข๐ฌ๐ญ๐ž๐ซ ๐€๐ฆ๐ข๐ญ ๐’๐ก๐š๐ก violated SEBI regulations by commenting or predicting a post-election stock market rally.

This topic has garnered attention following Indian National Congress‘s leader ๐‘น๐’‚๐’‰๐’–๐’ ๐‘ฎ๐’‚๐’๐’…๐’‰๐’Š’๐’” ๐’‚๐’๐’๐’†๐’ˆ๐’‚๐’•๐’Š๐’๐’๐’” linking these predictions to a subsequent market crash. Legal experts have weighed in, suggesting that the ๐ฌ๐ญ๐š๐ญ๐ž๐ฆ๐ž๐ง๐ญ๐ฌ ๐ฆ๐š๐๐ž ๐›๐ฒ ๐Œ๐จ๐๐ข ๐š๐ง๐ ๐’๐ก๐š๐ก ๐๐จ ๐ง๐จ๐ญ ๐›๐ซ๐ž๐š๐œ๐ก ๐’๐„๐๐ˆ ๐ซ๐ฎ๐ฅ๐ž๐ฌ.

Our founder and Managing Partner, Mr. Sumit Agrawal, a former SEBI Officer, provided insights where he explained that the statements were political rather than commercial and did not reference specific stocks. Thus, they do not fall under SEBI‘s Investment Advisers Regulations, 2013 or SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to securities market) Regulations, 2003.ย ๐ˆ๐ง๐๐ข๐š๐ง ๐’๐ž๐œ๐ฎ๐ซ๐ข๐ญ๐ข๐ž๐ฌ ๐‹๐š๐ฐ ๐ฌ๐š๐Ÿ๐ž๐ ๐ฎ๐š๐ซ๐๐ฌ ๐ ๐ž๐ง๐ž๐ซ๐š๐ฅ ๐œ๐จ๐ฆ๐ฆ๐ž๐ง๐ญ๐ฌ ๐ฆ๐š๐๐ž ๐ข๐ง ๐ ๐จ๐จ๐ ๐Ÿ๐š๐ข๐ญ๐ก, ๐ฐ๐ก๐ž๐ญ๐ก๐ž๐ซ ๐ฆ๐š๐๐ž ๐ฉ๐ฎ๐›๐ฅ๐ข๐œ๐ฅ๐ฒ ๐จ๐ซ ๐ฉ๐ซ๐ข๐ฏ๐š๐ญ๐ž๐ฅ๐ฒ.

Mr. Agrawal further details as to how in the United States, the U.S. Securities and Exchange Commission and US Courts have addressed cases aimed at curbing ‘reckless and careless statements,’ in relation to stock market, emphasizing the ‘duty of care’ for influential individuals. But in both countries, freedom of speech and expression under their Constitution is paramount.

Another expert Mr. Sandeep Parekh of Finsec Law Advisors also viewed that the statements were neither investment advice, nor was the PM acting as an investment advisor. The political optimistic statements are not violative and rather their statements are โ€œpermitted in Sebi’s regulationsโ€.

Politically, the Congress MPs questioned why both Modi and Shah had given “investment advices” during their mid-poll interviews and predicted major stock market boom on the election result day and are demanding a ๐‰๐จ๐ข๐ง๐ญ ๐๐š๐ซ๐ฅ๐ข๐š๐ฆ๐ž๐ง๐ญ๐š๐ซ๐ฒ ๐‚๐จ๐ฆ๐ฆ๐ข๐ญ๐ญ๐ž๐ž (๐‰๐๐‚) probe into last week’s boom-and-bust cycle in the successive days.

Read the full article of The Economic Times for a deeper understanding of this issue: https://lnkd.in/d3EVEm3j

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