𝐃𝐢𝐝 𝐏𝐌 𝐌𝐨𝐝𝐢 𝐚𝐧𝐝 𝐀𝐦𝐢𝐭 𝐒𝐡𝐚𝐡 𝐛𝐫𝐞𝐚𝐤 𝐚𝐧𝐲 𝐒𝐞𝐛𝐢 𝐫𝐮𝐥𝐞 𝐛𝐲 𝐩𝐫𝐞𝐝𝐢𝐜𝐭𝐢𝐧𝐠 𝐬𝐭𝐨𝐜𝐤 𝐦𝐚𝐫𝐤𝐞𝐭 𝐫𝐚𝐥𝐥𝐲 𝐚𝐟𝐭𝐞𝐫 𝐞𝐥𝐞𝐜𝐭𝐢𝐨𝐧𝐬?

The Economic Times Times recently published an article examining whether 𝑷𝒓𝒊𝒎𝒆 𝑴𝒊𝒏𝒊𝒔𝒕𝒆𝒓 𝒐𝒇 𝑰𝒏𝒅𝒊𝒂 Narendra Modi and 𝐂𝐚𝐛𝐢𝐧𝐞𝐭 𝐌𝐢𝐧𝐢𝐬𝐭𝐞𝐫 𝐀𝐦𝐢𝐭 𝐒𝐡𝐚𝐡 violated SEBI regulations by commenting or predicting a post-election stock market rally.

This topic has garnered attention following Indian National Congress‘s leader 𝑹𝒂𝒉𝒖𝒍 𝑮𝒂𝒏𝒅𝒉𝒊’𝒔 𝒂𝒍𝒍𝒆𝒈𝒂𝒕𝒊𝒐𝒏𝒔 linking these predictions to a subsequent market crash. Legal experts have weighed in, suggesting that the 𝐬𝐭𝐚𝐭𝐞𝐦𝐞𝐧𝐭𝐬 𝐦𝐚𝐝𝐞 𝐛𝐲 𝐌𝐨𝐝𝐢 𝐚𝐧𝐝 𝐒𝐡𝐚𝐡 𝐝𝐨 𝐧𝐨𝐭 𝐛𝐫𝐞𝐚𝐜𝐡 𝐒𝐄𝐁𝐈 𝐫𝐮𝐥𝐞𝐬.

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. 𝐈𝐧𝐝𝐢𝐚𝐧 𝐒𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐋𝐚𝐰 𝐬𝐚𝐟𝐞𝐠𝐮𝐚𝐫𝐝𝐬 𝐠𝐞𝐧𝐞𝐫𝐚𝐥 𝐜𝐨𝐦𝐦𝐞𝐧𝐭𝐬 𝐦𝐚𝐝𝐞 𝐢𝐧 𝐠𝐨𝐨𝐝 𝐟𝐚𝐢𝐭𝐡, 𝐰𝐡𝐞𝐭𝐡𝐞𝐫 𝐦𝐚𝐝𝐞 𝐩𝐮𝐛𝐥𝐢𝐜𝐥𝐲 𝐨𝐫 𝐩𝐫𝐢𝐯𝐚𝐭𝐞𝐥𝐲.

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 “permitted in Sebi’s regulations”.

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 𝐉𝐨𝐢𝐧𝐭 𝐏𝐚𝐫𝐥𝐢𝐚𝐦𝐞𝐧𝐭𝐚𝐫𝐲 𝐂𝐨𝐦𝐦𝐢𝐭𝐭𝐞𝐞 (𝐉𝐏𝐂) 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