Bridging Gaps In Securities Law: The Market Opportunities And The Regulatory Pathways Of Fractional Shareholding In India
- IJLLR Journal
- Oct 28
- 1 min read
Ishaan Tyagi, West Bengal National University of Juridical Sciences
Harshitha Agrawal, West Bengal National University of Juridical Sciences
ABSTRACT
This study explores the rise of fractional share investments and its potential to transform domestic capital markets. By enabling investors to acquire fractions of expensive equities, fractional ownership lowers barriers to entry, promotes diversification, and supports financial inclusion. Although countries such as the U.S., U.K., Singapore, and Japan have already embraced this model through broker-dealer and platform-based mechanisms, Indian legislation such as the Companies Act, 2013, currently bars issuing less than one full share. In response to growing interest, the SEBI has urged creating a regulatory framework that balances investor access with safeguards. The paper reviews the benefits of fractional investing, contrasts India’s settlement and clearing mechanisms with global approaches, and highlights how distributed ledger technology could facilitate transparent, efficient, and secure trading. It further examines implications for corporate governance, including taxation, voting rights, and initial public offerings. Building on SEBI’s experience with Differential Voting Rights, the study recommends reforms tailored for India, emphasising statutory amendments, technological innovation, and regulatory clarity. The paper concludes that fractional shares can democratize participation, strengthen inclusivity, and enhance the long-term resilience of India’s financial system.
