Procedure for seeking prior approval for change in control
Summary
This circular establishes the streamlined procedure for intermediaries to seek prior approval from SEBI in case of a change in control. It mandates online applications via the SI Portal and requires specific disclosures regarding shareholding, litigation, and fit-and-proper criteria. The document also outlines special provisions for changes involving NCLT schemes and supersedes previous circulars effective December 1, 2022.
Text
SEBI vide circular no. CIR/MIRSD/14/2011 dated August 02, 2011 had specified the procedure for seeking prior approval for change in control of certain intermediaries including stock brokers, depository participants and RTAs.
Stock broker, clearing member, depository participant, investment adviser, research analyst, registrar to an issue and share transfer agent and KRA shall obtain prior approval of SEBI in case of change in control as per respective regulations.
The Intermediary shall make an online application to SEBI for prior approval through the SEBI Intermediary Portal (‘SI Portal’).
The online application shall be accompanied by current and proposed shareholding pattern of the applicant.
Applicant must disclose whether any application was made in the past to SEBI seeking registration in any capacity but was not granted, with details if yes.
Applicant must disclose status of actions under SCRA/SEBI Act and confirm that acquirer shall honour all past liabilities / obligations of the applicant.
Applicant must disclose pending investor complaints and steps taken, confirming that acquirer shall resolve the same.
Details of litigation(s), if any, must be provided.
Confirmation that all the fees due to SEBI have been paid.
Declaration cum undertaking stating no change in Board till approval, informing investors prior to change, and compliance with 'fit and proper person' criteria.
Registered stock broker, clearing member, or depository participant shall obtain approval/NOC from all relevant stock exchanges/clearing corporations/depositories.
The prior approval granted by SEBI shall be valid for a period of six months from the date of such approval within which the applicant shall file application for fresh registration pursuant to change in control.
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Source: SecMarx — Procedure for seeking prior approval for change in control. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.