WHAT IS SECURITIES LAW?
A security is a financial investment. Usually, a corporation offers a security in order to raise capital for their business. A stock is an example of a security. Bonds, mortgages and loan packages may also be securities. Securities are a way of financing a business enterprise or making an investment in a business.
The investors who buy a security hope to profit from the transaction. The corporations who sell securities want to raise money. Securities are an important part of business. Security laws ensure that this aspect of business operates fairly to all involved in the buying and selling of securities. Most securities are public offerings, but a security may also be private with a limited group of investors.
Securities law (or Capital Markets law), therefore, is the group of laws and regulations that govern the issuance of securities. A security is a financial instrument usually designed to raise money for a business from investors in the business. Securities law dictates what a corporation has to do in order to offer their investment to the public. The laws exist in order to make sure that public investments are fair to everyone who might invest in the company.
In this article, Team YLCC gives you a detailed overview on a career in securities law in India. Read on!
SECURITIES LAW IN INDIA
India currently has a robust Securities Law framework that manifests itself across multiple statutes such as the The Securities Contract Regulation Act of 1956, Securities Exchange Board of India Act of 1992 and the Depositories Act of 1996. In addition to this, the SEBI as a regulatory body has framed over 30 specific regulations over time that have the effect of law.
WHAT IS THE KIND OF WORK INVOLVED IN THIS SECTOR?
Securities law in itself offers a varied job profile and ranges across a number of niche areas, which may or may not be handled by a single individual. However, all dimensions of the work involved in securities law are inter-related and the skills for the same can be acquired over time.
Transactional Securities Advisory
To offer a security, a corporation must prepare the investment for offering. Securities lawyers are transactional lawyers in that they advise their clients about how to make a public offering. They prepare documents and negotiate investments. Security law is business law. Security lawyers negotiate investment deals and prepare and review documents for their clients as part of the process of offering a public investment in a business.
Regulatory Securities Advisory
Regulatory securities law is helping a client comply with the myriad of state and federal regulations that apply to security offerings. Both before and after a business is offered to the public for investment, the business must comply with regulatory filings and mandatory information disclosures. They must prepare statements both quarterly and annually. Securities lawyers help their clients comply with the regulatory process by preparing and reviewing mandated disclosures.
Litigation Securities Advisory
When disputes arise in buying and selling securities, lawyers who practice securities law become litigators. They prepare filings for court. They participate in the traditional activities of litigation including discovery, motion practice and trial. Many litigation cases go to arbitration, so attorneys who practice securities law must be skilled in arbitration. Attorneys working in securities regulation may represent both corporations and investors. When an investor believes that a corporation has acted with fraud or has otherwise failed to comply with securities regulations, they may seek the help of a securities lawyer to help them pursue a remedy. In turn, corporations rely on attorneys to help them defend against allegations of fraud.
Administrative Securities Advisory
In addition to transactions, regulations and litigation, the practice of securities law may include an appearance in an administrative hearing. If the Securities and Exchange Commission (SEC) suspects non-compliance or fraud, they may bring a civil action to an administrative law judge within the SEC. The SEC judge is an independent judge who hears allegations of non-compliance with securities laws. Lawyers work to both pursue allegations of violations on behalf of the SEC as well as to defend against the allegations on behalf of corporations.
COMMON TASKS INVOLVED
A securities lawyer usually advises clients on the following aspects:
- Breach of fiduciary duty
- Conflict of interest
- Churning (excessive trading to increase broker’s fees)
- Failure to diversify
- Failure to supervise
- Ineptitude or malpractice
- Insider information
- Market manipulation
- Misrepresentation
- Omission of facts
- Risky investments
- Trading without permission
- Unsuitability
In doing so, a securities lawyer may have to perform certain tasks on a regular basis:
- Advising clients: As a securities lawyer, you would most likely be responsible for providing legal advice to clients like businesses or corporations. This advice may help them determine appropriate legal processes for transactions, or assist a business to ‘go public.’
- Preparing documents: Securities lawyers often draft or write legal documents that are necessary for their clients business transactions.
- Litigation: If you become a securities litigator, you may engage in litigation against companies or individuals who have violated the terms of an agreement.
WHERE CAN I WORK AS A SECURITIES LAWYER IN INDIA?
Securities lawyers often work at a law firm, which can range in size from a small or medium-sized firm all the way up to a large law firm. Most of the leading law firms in India have dedicated teams for securities law and capital markets. In addition to this, boutique law firms also exist which deal with only in securities law. Given below are some such firms:
- AZB & Partners
- Cyril Amarchand Mangaldas
- IndusLaw
- J Sagar Associates
- Khaitan & Co LLP
- S&R Associates
- Shardul Amarchand Mangaldas & Co
- L&L Partners Law Offices
- Trilegal
- ZBA
- Bharucha & Partners
- SNG & PARTNERS
One also work for government organisations or regulations such as the SEBI as an in-house counsel or for start-up advisories. Some trade associations also employ securities lawyers and securities litigators.
HOW TO BECOME A SECURITIES LAWYER?
Academics
Needless to say, one has to enroll in a degree of law at the undergraduate level. In addition to this, if it is a 5-years’ course of law, one has to opt for Securities Law or Business Law as an elective paper for better understanding of the subject
A specialisation in securities law can be acquired through a Master’s Degree. Several national law universities offer LLM programs with a specialisation in securities law such as a Masters in Business Law in Securities and Capital Markets offered by NUJS in Kolkata and an LLM in Investment and Securities Law offered by Maharashtra National Law University in Mumbai jointly with National Institute of Securities Market, an initiative of SEBI. Certificate or diploma courses on financial regulations or securities law are also offered by certain institutes.
Co-Curricular
A student interested in this field may choose to participate in co-curricular activities involving in securities law such as drafting exercises or quizzes.
Publishing academic papers on an issue related to securities law can also be a brilliant avenue for gaining knowledge on the field and building crucial research skills that can definitely be put to good use later on in the profession. A candidate who has published quality papers on the sector is also considered a positive sign by recruiters looking to hire securities lawyers for entry-level positions.
Practical Experience
As is the norm in Indian legal education, a student is law is expected to pursue internships from the 2nd year onwards, depending on the area of choice. A student looking to pursue a career in the Securities Law sector may apply for short-term and long-term internships at law firm to develop an in-depth understanding of how it works and to develop the adequate skillset required for the field under the guidance of a senior at the firm.
Needless to say, one must continue to study the subject not only for domestic but also for international jurisdictions in order to keep oneself updated of the latest developments in the field to be able to do one’s job better and provide the best services to the client.
YLCC would like to thank the Content Team for their valuable insights in this article.
