This article is written by Ramanuj Mukherjee, CEO, LawSikho.

Are you interested in Securities Appellate Tribunal (SAT) Litigation? I suppose you are interested in acquiring securities law skills, develop a strategic understanding of mechanisms and regulations of the stock market, IPOs and listing, role and functions of SEBI, and enforcement of securities regulations. Perhaps, you are interested in becoming a hot-shot securities lawyer, or perhaps your interest lies in securities law as an executive working in one of the stakeholders of market intermediaries.

Our primary focus, however, is on the practical aspects of securities law litigation. This is a prominent area of law practice, but very niche and extremely rewarding. We have been in the process of creating a cutting edge training program for securities lawyers, and what we discovered while working towards the same with lawyers who actually practice this craft, was simply mind-blowing.

Why is securities law an attractive area to practice in? Why should you develop expertise in securities law and invest time and effort in learning its intricacies? Is it worth the time?

There are 33 million stock market investors in India. There are 2.78 crore SIP (systematic investment plan) accounts through which Indians are investing in the stock market on a regular basis. In July 2019 alone, Rs. 8,324 crores were pumped into the market through these SIP accounts. 

There are 44 registered asset management companies offering over 2000 registered mutual fund schemes. The asset under management (AUM) of Indian mutual fund industry has grown from 7.22 trillion Indian rupees to 24.54 trillion rupees in last 10 years. That is a 3 and a half fold increase in just 10 years.

According to July 2019 data from Hindu Businessline, around 89 companies had either received clearance for IPO or are waiting for such approval. 

Foreign Portfolio/Institutional Investors (FPI/FII) have been one of the biggest drivers of India’s financial markets and have invested around Rs 12.51 trillion (US$ 171.81 billion) in India between FY02-18. 

Domestic Institutional Investors have pumped in 10,785 crores in net purchase into Indian stock markets in the month of August so far, as of 14th August, despite a structural slow down in the Indian economy. This is a sign of investor faith in long term growth story of Indian economy and strength of Indian stock markets.

It is not just equity investments, but also debt capital market as well as derivatives and commodity segments that have done extremely well in India. 

The underlying strength of the market and the growing volumes suggest that there will be a growing need for lawyers who understand the capital markets and SEBI regulations. We are looking at an amazing long term opportunity for those who wish to work in capital markets and especially securities litigations, provided you develop the right skills.

Please note that there are ups and downs in the stock market and the economy, which can temporarily impact the jobs of capital market and securities lawyers. For example, if the number of IPOs happening go down significantly due to a market slow down, filing of new DRHPs may stop, reducing work for the lawyers.

However, during such times litigation and action from regulator can see a spike, which more than compensates for slow down in IPOs. 

Also, let us be honest. Filing one DRHP after another can be quite tiresome. That is where learning litigation and dispute work related to SEBI and securities can be such a blessing.

Who could be your clients if you become a securities lawyer?

If you were a securities lawyer, who could be your clients? Let’s share some random examples:

• SMEs doing an IPO in the SME market
• Institutional buyers, a company trying to get listed, stock exchanges
• Asset management companies
• Foreign institutional investors and portfolio investors
• Victims of securities fraud, mis-selling or misrepresentation by brokers and investment advisors
• Shareholders contemplating class action against a company
• SEBI when in need of specialized advice
• Directors and promoters accused of insider trading or other offences under SEBI regulations
• Merchant bankers, investment banks 
• Large stock brokers and other intermediaries requiring compliance, advisory or litigation support

Pros and cons of practicing securities law

Securities law and SAT is a golden niche for commercial litigators. Unlike other tribunals, such as NCLT and DRT, SAT does not have as many lawyers practicing. Being a less crowded field which is rapidly growing in terms of opportunity, it is easier to get it right in a platform like this provided you bring the right kind of knowledge and skills on the table. 

And if we are talking about competition, there is no field in law where you won’t face any competition. While there are fewer lawyers in this area, the quality of lawyers is also much higher. The only way to beat the competition is to be well prepared. It is not possible to do well in this quite technical area without being competent. Given the high stakes and sophisticated clientele, if you do not have the skills necessary to deliver results, you may not survive in this market for long. However, the rewards definitely justify the efforts you will have to put in.

In SAT matters, usually hefty sums of money will be in question, so you get the opportunity of charging a very good sum of money as well as the opportunity to make an overnight name for yourself by delivering excellence. Once you begin to get favourable orders, you would not struggle to find clients.

Another good thing about SAT is that it is very future proof. Whatever things that negatively affect conventional areas of practise can’t touch SAT litigators. For instance, economic slowdown. It is something which affects almost every area of law badly, but dispute work increases in economic slowdown. It is also more immune to technological developments such as artificial intelligence which is taking away work of young lawyers in some other areas of practice.

What do you need to learn to be a securities lawyer?

If you want to succeed in securities law, you have to understand the working of stock market and SEBI regulations to its depths. You have to master several concepts with respect to capital markets and regulation.

Here is a list of some of the things you have to learn in order to get started as a securities lawyer: 

• SEBI’s regulations for IPOs, intermediaries, listing of debt securities and other instruments
• Listing Obligations and Disclosure Requirements Regulations
• Delisting Guidelines
• Insider Trading Regulations
• Unfair Trade Practices regulations
• Companies Act requirements pertaining to the listed companies
• Application for Takeover codes
• Drafting a code of fair disclosures, a code of conduct, memorandum of appeal
• SEBI proceeding: notice, response and settlement

Where can you get a job?

• In-house legal teams in listed entities: In-house legal teams  and compliance teams in corporations of listed companies like Oil and Natural Gas Corp. Ltd, Hindustan Petroleum Corporation, HDFC, Reliance, Tata Motors etc hire securities lawyers.
• Large conglomerates: Top conglomerates like TATA group, Reliance, Bharti Enterprises, Adani group, Hinduja need to hire experts in securities law.  
• Law firms: There are many firms, starting from big law firms to securities law boutiques where you can get a job as a securities lawyer.
• Corporate brokers: Stock broking firms with large volumes often hire securities lawyers given that many disputes arise in the course of their day-to-day work.
• Investment banks/Portfolio managers/ Merchant bankers: these are great places for securities lawyers to work in as well.   
• SEBI: The most prestigious organisation SEBI hires grade A officers. Having the knowledge of securities law will give you a competitive edge and make you stand-out in the interview phase. 
• Stock exchanges: You could also get a job in the NSE, BSE, MCX etc. in order to tackle legal issues associated with operations. Stock exchanges are good places for young lawyers to gain knowledge and experience and the pay is also quite good.  

Securities law is not everyone’s cup of tea

Firstly, those from Mumbai have an undue advantage when it comes to securities law because that is where the financial capital of India is, and SEBI as well as SAT is located.  Vast majority of India’s securities lawyers are therefore located in Mumbai, although there is some demand for securities lawyers as in-house experts in other big metros as well.

If you are an in-house lawyer in a listed company, or a company that is going to be listed soon, you are strongly recommended to learn securities law well. It could be a major booster in your career.

However, if you do not practice law in Mumbai or frequently travel to that city and do not wish to work as an in-house lawyer in listed companies, securities law may not be relevant for you.

However, if you are interested in the capital markets, if the stock markets make you excited, if you are interested in boardroom wars and working with India’s biggest conglomerates and companies, on matters that make headlines in the Economic Times, then securities law is very exciting.

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