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Recently, The Securities and Exchange Board of India (SEBI) in May, 2022 has issued guidelines for seeking No Objection Certificate (NOC) by Stock Brokers or Clearing Members to establish joint ventures, Step Down Subsidiaries, Joint Ventures, Wholly owned subsidiaries in GIFT (Gujarat International Finance Tech-City) International Financial Service Centre (IFSC) and the list of supporting documents to be attached with the application.
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A step down subsidiary is a subsidiary company of a company who is a subsidiary of another company. For example where a company C is a subsidiary of a company B and company B is a subsidiary of company A. This means that company C shall be called as a step down subsidiary of company A.
SEBI guidelines on establishing wholly owned subsidiaries in GIFT shall be applicable on the following entities:
The general practice followed by Stock Brokers or Clearing Members for seeking NOC to establish or setting up Joint Ventures, Step down Subsidiaries, wholly owned subsidiaries in GIFT IFSC is to make an application to SEBI to grant NOC to set up the above mentioned legal entities by the Stock Brokers/ Clearing Members.
With these new guidelines, SEBI has streamlined and rationalised the process of obtaining NOC by Stock brokers/ Clearing members for setting up wholly owned subsidiaries in GIFT IFSC. Similar process goes for setting up Joint ventures, step down subsidiaries etc.
The new guidelines released by SEBI for setting up wholly owned subsidiaries in GIFT IFSC are as follows:
The above guidelines shall come into force with immediate effect. The guidelines in the above circular have been issued in exercise of the powers conferred under section 11(1) of the Securities and Exchange Board of India Act, 1992 (SEBI Act) in order to protect the interests of the investors in securities and to promote the development of and to regulate the securities market.
Read Our Article: Compliances for Foreign Subsidiary Company in India
Prabhat has done his BA LLB (Hons) and has been writing research papers since his law school days. His interest in content writing made him pursue a career in legal research and content writing. His core areas of interest are indirect taxes, finance and real estate.
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