Combining our legal expertise and utilizing
'backstage pass to the world economy'
we get access to a unique vantage point on
global trade to offer you comprehensive
market research solutions and invaluable insights.
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Sunil Sethi & Co.
Advocates and Tax Consultants
Capital Markets
The world of capital markets is vast and diverse. Capital markets encompass a wide array of financial instruments and participants. We offer a comprehensive outsourced complaint and regulatory service for businesses of all types and sizes. We promise a fast turnaround and guaranteed quality for all bookkeeping jobs. All our bookkeepers are certified bookkeeping professionals with several years of bookkeeping experience supervised by experienced financial professionals.
Historical context and development
Picture 17th and 18th centuries, a time when the stock market was less about sleek electronic tickers and more about shouting at each other in coffeehouses. Yes, the good old days when investors jostled for attention over the latest stock tip while sipping their espresso, or more likely, their gin.
The Market's Raucous Beginnings
Amsterdam Stock Exchange: Imagine the Dutch East India Company’s brainchild—established in 1602—like the first edition of a financial magazine that nobody had ever read. This was the world’s inaugural stock exchange, where traders could buy and sell shares of companies, assuming they weren’t too busy enjoying the tulip mania or avoiding a maritime catastrophe.
London Stock Exchange: Fast forward to London, where Jonathan’s Coffee House was the original trading floor, and brokers were basically having their own financial soap opera over coffee. The London Stock Exchange wasn’t officially a thing until 1801, but before that, trading was like an exclusive club where only those who could shout the loudest (or had the best coffee) got heard.
Trading Tools and Techniques
Venues: If you thought your office was noisy, imagine a stock market where deals were struck over a cacophony of shouting in coffeehouses and taverns. It was like the original open outcry, but with a side of socializing and the occasional bar fight. The only thing missing was a modern HR department.
Communication: Instead of instant messages and Twitter feeds, traders relied on newspapers and financial journals to get their market gossip. Prices were updated at a snail’s pace, so if you wanted to know what a stock was worth, you had to wait for the next edition—talk about a slow news day!
Price Discovery: The “open outcry” method was basically a glorified shouting match. Traders would thrust their bids and offers into the air like a chaotic auctioneer's dream, hoping someone would pay attention. Price discovery was less about sophisticated algorithms and more about who had the loudest voice.
The Spectacle of Market Practices
Speculation: Enter the era of speculative trading—where dreams of riches often turned into bubbles of epic proportions. The South Sea Bubble of 1720 was like the original Wall Street scandal, showing that people were as prone to irrational exuberance then as they are now.
Brokers and Jobbers: Brokers played the role of middlemen in this high-stakes game of financial ping-pong. Jobbers, the precursors to modern market makers, were there to provide liquidity—kind of like the waterboys of the trading floor, keeping things moving even when the market was more a muddle than a model of efficiency.
Settlement and Clearing: Trades were settled through a laborious process of physical paperwork and face-to-face interactions. Forget digital confirmations; if you wanted to prove you had a trade, you’d need to deliver physical documents. The phrase “paper trail” took on a whole new meaning.
Our Capital Markets team comprises specialized securities lawyers who are regarded as the best in India, with an outstanding reputation for handling a broad spectrum of transactions and clients. Our core clientele includes issuers from a variety of sectors as well as securities market intermediaries such as merchant bankers, stock brokers and portfolio managers.
Through our Capital Markets practice, we offer our clients — whether they are unlisted corporates tapping markets for the first time or a listed corporate exploring more complex, multi-source solutions –structures and flexibility to raise any form of finance they need. And with the development and diversification of capital markets, we have been a trusted partner of our clients in navigating important changes and taking advantage of opportunities.
Over the years, our lawyers have had a prominent role in many of the developments that have transformed Indian capital markets, most notably, growth of the public markets, development of niche products such as REITs and InvITs and globalization of capital markets through depository receipts and foreign listing. Our Markets practice spans raising of capital, both equity and debt, and financial regulatory practice.
In addition to many firsts, largest and complex deals, our Markets practice has been the vanguard of development in Indian securities laws. We have actively participated and contributed to the evolution of the capital markets regulatory regime in India. Having been in the industry for close to three decades, we have regularly collaborated with the securities market regulator, the SEBI, as well as the RBI, the CCI, the MCA and the Ministry of Finance.
Financial Instruments
Capital markets encompass a wide array of financial instruments aka market securities. Below is a list of some key Financial Instruments within capital markets:
Equity Instruments/ Securities
Common Stocks
Preferred Stocks
Debt Instruments (Fixed Income)
Corporate Bonds
Government Bonds
Municipal Bonds
Treasury Securities
Convertible Bonds
Mortgage-Backed Securities (MBS)
Asset-Backed Securities (ABS)
Derivative Instruments:
Futures Contracts
Options Contracts
Forward Contracts
Swaps
Contracts for Difference (CFDs)
Options on Futures
Forward Rate Agreements (FRAs)
Interest Rate Options
Weather Derivatives
Real Estate Derivatives
Equity Derivatives
Credit Derivatives
Commodity Derivatives
Volatility Derivatives
Convertible Bonds
Money Market Instruments
Treasury Bills
Commercial Paper
Certificates of Deposit (CDs)
Repurchase Agreements (Repos)
Virtual Digital Assets
Cryptocurrency
NFTs (Non-Fungible Tokens)
Metaverse Land
Smart Contracts
Decentralized Finance - DeFi
Commodities
Precious Metals (Gold, Silver, etc.)
Energy (Crude Oil, Natural Gas, etc.)
Agricultural (Wheat, Corn, etc.)
Industrial Metals (Copper, Aluminum, etc.)
Currencies
Cross-currency rates
Participants
Individual Investors:
Retail Investors (individuals)
High Net Worth Individuals (HNWIs) >US$1mn invested
Ultra High Net Worth Individuals (UHNWIs) >US$30mn invested
Family Offices >US$50mn
Institutional Investors:
Mutual Funds (Asset Management Cos)
Pension Funds
Insurance Companies
Endowments and Foundations
Sovereign Wealth Funds
Collective Investment Vehicles
AIFs (Alternative Investment Funds) - Class I, II, III
Venture Capital Funds and InvITs (Infrastructure Investment Trusts)
Private Equity Funds and REITs (Real Estate Investment Trusts)
Hedge Funds
Banks and Financial Institutions:
Commercial Banks
Investment Banks
Central Banks
Development Banks
Core Investment Companies (CIC)
NBFCs
Asset Managers:
Asset Management Companies
Hedge Funds
Private Equity Firms
Venture Capital Firms
Portfolio Management Cos
Stock Exchanges and Trading Platforms:
NYSE (New York Stock Exchange)
NASDAQ
BSE (Bombay Stock Exchange)
NSE (National Stock Exchange, India)
LSE (London Stock Exchange)
Other Regional and International Exchanges
Regulatory Bodies:
Securities and Exchange Commission (SEC, U.S.)
Financial Industry Regulatory Authority (FINRA, U.S.)
Financial Conduct Authority (FCA, UK)
Securities and Exchange Board of India (SEBI)
Various other national regulatory authorities
Market Intermediaries:
Stock Brokers
Market Makers
Clearing Houses and Custodians
Issuers:
Publicly Traded Companies
Governments (for government bonds)
Municipalities (for municipal bonds)
Private Companies (in the case of private placements)
Individual Traders and Speculators:
Day Traders
Algorithmic Traders
Proprietary Trading Firms
Credit Rating Agencies: Provide credit ratings for debt instruments.
Research Analysts and Financial Media: Provide information and analysis on financial markets and instruments.
Legal and Accounting Firms: Play roles in ensuring compliance and reporting standards.
Global Markets
Like investments, doing business inherently entails certain risks. Our business support services facilitate compliance with legal and regulatory mandates, ensuring your steadfast adherence to the law.
Consistently pioneering novel structures for our sophisticated client base.
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