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Deal: Trilegal successfully represented the National Stock Exchange in appeals before the NCLAT against NCLT orders admitting certain stockbroking entities into insolvency under the IBC 2016

14 Sep 2023

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Trilegal advised and represented the National Stock Exchange (NSE) in appeals before the National Company Law Appellate Tribunal (NCLAT) against orders of the National Company Law Tribunal admitting certain stockbroking entities into insolvency under the Insolvency & Bankruptcy Code, 2016 (IBC).

NSE, as a first-level regulator of the securities market, contented that stockbroking entities would fall within the definition of ‘financial service providers’ and, thus, are excluded from the purview of the IBC. It was further submitted that the mechanism under the IBC would be incompatible with the mechanisms already in place to deal with defaulting stockbroking entities, and initiation of insolvency proceedings against stockbroking entities would affect the interests of investors/public at large.

The NCLAT’s landmark decision upholds NSE’s contention and settles the law on the issue that since stockbroking entities are regulated by the SEBI (in conjunction with stock exchanges), provisions of the IBC would not be applicable to such entities. The NCLAT also observed that since specific mechanisms are in place to deal with defaulting stockbrokers, insolvency proceedings cannot be initiated against such entities unless there is a notification by the Central Government to this effect.

The Trilegal team advising on the matter was led by our Dispute Resolution Partner Shankh Sengupta along with Shruti Rajan (Financial Regulatory). Other attorneys who were involved in the matter are Vividh Tandon, Aubert Sebastian, and Anubhav Ghosh, Counsels; Nishi Bhankaria and Ribhu Garg, Senior Associates.

About Trilegal

Trilegal is one of India’s leading law firms, with expertise across the full spectrum of corporate legal services. Trilegal has offices in four key cities of India.

Trilegal has been recognised as the India Deal Firm of the Year by Asian Legal Business (ALB) India Law Awards 2023; one of the ‘Best Overall Law Firms’ at the India Business Law Journal Indian Law Firm Awards 2022; ‘Firm of the year’ for Client Service Excellence by Asia Law Awards 2021; “M&A Law firm of the Year” by VCCircle Awards 2020 one of the most innovative law firms in Asia in the inaugural edition of ALB Trailblazers 2020; and ‘highly commended’ in the FT RSG Innovative Lawyers Awards 2020.

For more information, please contact:

Sahil Wason
Mob: +91-8928008122 |

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