Bridging Markets: Legal Implications and Solutions for Fractional Share Investment in India

Bridging Markets: Legal Implications and Solutions for Fractional Share Investment in India

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Volume 16 Issue 1 ()

Fractional share investment has demonstrated its significance in advancing the growth and expansion of capital markets across multiple jurisdictions, as well as retail investor empowerment. In India, the regulatory framework for the clearing and settlement process of trades would necessitate technological and legal modifications to implement fractional share investment. This paper explores the legal and technological aspects of implementing fractional share investment in India. It addresses taxation, shareholder voting rights, and initial public offerings, and proposes changes to the roles of depositories and clearing houses. The paper advocates for the adoption of distributed ledger technology to facilitate fractional share investment, which will offer an efficient legal and technological model. It also examines the economic rationale and international best practices to present a comprehensive blueprint for fractional share investment in India.

Cite as: Dhaval Bothra & Mukund Arora, Bridging Markets: Legal Implications and Solutions for Fractional Share Investment in India, 16 NUJS L. Rev. 23 (2023)