Market regulator SEBI, on Monday, said market intermediaries such as stock brokers, depository participants, Registrar and Transfer Agents (RTAs) and others must seek its prior approval for any change of control in the company structure.
The new framework, which will be applicable from December 1, has been made to streamline the process of providing approval to the proposed change in control of the entities.
Under the provisions, an intermediary should apply online for SEBI’s prior approval (SEBI intermediary portal) with details such as the acqurirer’s name and details, the current and proposed shareholding pattern of the applicant.
Approval validity
“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,” the circular said.
Besides, the entity has to provide declaration that there will not be any change in the board of directors till the time prior approval is granted.
Timely application
The ‘fit and proper person’ criteria should also be complied with, the circular said and added cases involving scheme of arrangements should file the application with SEBI prior to filing the application with NCLT, the circular said and added:. An in-principle approval will be given for three months provided all other regulatory compliances are met. Within 15 days from the date of the National Company Law Tribunal’s order, the intermediary should submit an online application for SEBI’s final approval.