Oct 19, 2023

Amendment in Process for SEBI Approval for Change in Control of Merchant Bankers/Bankers to Issue

SEBI, by way of a Circular dated August 10, 2023, has streamlined the procedure for obtaining its prior approval for any proposed change in control of registered merchant bankers and bankers to an issue (‘Intermediary’), with effect from September 01, 2023.

The revised process requires the Intermediary to make an online application through the SEBI intermediary portal, which needs to be accompanied by information about the Intermediary, the acquirer or persons and the directors or partners of such acquirer or persons, who will receive control. The above information inter alia includes the current and proposed shareholding pattern of the Intermediary, details of previous applications to SEBI (if any), details of litigation or previous action(s) initiated by SEBI, a declaration cum undertaking of the Intermediary, acquirer or person receiving the control in the format prescribed under the Circular, etc.

Additionally, if the incumbent Intermediary is also a registered stockbroker, clearing member or depository participant, such Intermediary is required to obtain an approval/ no-objection certificate from all the SEs, clearing corporations or depositories, where it is a member or depository participant and submit a self-attested copy of the same to SEBI.

Subject to other sectoral regulator’s approval for change in control, if any, the prior approval granted by SEBI will be valid for six months from the date of such approval within which the applicant must file an application for fresh registration pursuant to change in control.

The Circular also provides for the revised procedure for any proposed change in control of the Intermediary, pursuant to scheme(s) of arrangement requiring sanction from National Company Law Tribunal under the Companies Act.




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