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On 2nd June 2022, vide circular number SEBI/HO/IMD-1/ DOF1/P/CIR/2022/77, the Securities and Exchange Board of India (SEBI) issued a Circular seeking prior approval for change in control of Portfolio Managers. In the Circular, SEBI has tried to streamline the procedure of providing approval to the proposed change in control of the portfolio manager. In this Circular, SEBI has prescribed the procedure which needs to be followed by the Portfolio Managers in matters which involve schemes of arrangement requiring the sanction of NCLT.
Table of Contents
The circular titled “Procedure for seeking prior approval for change in control of Portfolio Managers” is applicable to all the Portfolio Managers.
Background
According to Regulation 11(aa) of SEBI (Portfolio Managers) Regulations, 2020, prior approval has to be obtained from SEBI in case of any change in control of the Portfolio Manager. The procedure for obtaining such prior approval in case of change in the control of the Portfolio Manager has been specified by SEBI vides Circular Number SEBI/HO/IMD/IMDI/DOF1/P/CIR/2021/564 issued on 12th May 2021.
Streamlining of the process of change in control of portfolio manager
SEBI, through this Circular, has tried to streamline the process of providing approval to the proposed change in the control of the Portfolio Manager. In furtherance of this, modifications were made to the Circular Number SEBI/HO/IMD/IMDI/DOF1/P/CIR/2021/564 issued on 12th May 2021. The changes made are here as under:
The particulars of this circular shall come into effect from 15th June 2022 onwards. The particulars of this Circular shall be applicable to all the applications for approval of applications for change in control of portfolio managers. It must be noted that, SEBI Circular number SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/564 issued on 12th May 2021 shall stand superseded with effect from the date when this revised Circular shall come into effect.
This Circular on modified SOP on defaulting members has been issued in exercise of the powers conferred on the SEBI under section 11(1) of the Securities and Exchange Board of India Act, 1992, read with Reg. 43 of the SEBI (Portfolio Managers) Regulations, 2020 in order to protect interests of the investors in the securities market and also to promote the development and regulation of the securities market.
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