Fraud Under Sebi (Prohibition Of Fraudulent And Unfair Trade Practices Relating To Securities Market) Regulations, 2003:
Fraud Under Sebi (Prohibition Of Fraudulent And Unfair Trade Practices Relating To Securities Market) Regulations, 2003: A Doctrinal Analysis Distinct From The Indian Contract Act And The Companies Act, 2013, With A Judicial Mapping Of "Dealing In Securities
Adv. Om Radheshyam Nishad, Pursuing Post Graduate Diploma in Securities Law from Government Law College
ABSTRACT
This paper analyzes the concept of fraud as stated in SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (PFUTP Regulations) and to spot the differences between it and fraud under Indian Contract Act, 1872 Section 17 and Companies Act, 2013 Section 447. Even though a fraud by way of deliberate cheating is a crime in all these three statutes, they concern different levels of law. The Indian Contract Act regards fraud as a reason for breaking of contractual consent between the parties, who can be identified, whereas Companies Act, sees fraud as a corporate crime which requires proving of criminal intention. PFUTP, however, looking at the maintenance of fairness in the market, thinks that even without direct evidence of mens rea, the idea of manipulative intention can be inferred from trading patterns, market impact and other surrounding conditions.
Keywords: SEBI, PFUTP Regulations 2003, Fraud, Indian Contract Act, Companies Act 2013, Dealing in Securities, Market Manipulation, Insider Trading, Market Integrity, SAT.
