Regulation 11(aa) of SEBI (Portfolio Managers) Regulations, 2020 (“Portfolio Regulations”) provides that a portfolio manager shall obtain prior approval of Securities and Exchange Board of India (“SEBI”) in case of change in control in such manner as may be specified by SEBI. Subsequent to which SEBI vide circular dated May 12, 2021 (“May Circular”), had specified the procedure for obtaining prior approval in case of change in control of portfolio managers.
With regard to further streamlining the process of providing approval to the proposed change in control of a portfolio manager, in modification to the May Circular, SEBI vide its circular dated June 2, 2022 (“Circular”) has stated the following:
i) The application seeking approval for the proposed change in control under Regulation 11(aa) will be filed with SEBI prior to filing the application with NCLT;
ii) Upon being satisfied with compliance of the applicable regulatory requirements, in-principle approval will be granted by SEBI;
iii) The validity of such in-principle approval will be 3 (three) months from the date of such approval, within which the relevant application shall be made to NCLT;
iv) Within 15 (fifteen) days from the date of the order passed by the NCLT, the portfolio manager will have to submit an online application in terms of paragraph 2(i) of the Circular along with the documents specified in the Circular to SEBI for its final approval; and
v) All other provisions mentioned in paragraphs (ii)-(iv) of above will apply.
The provisions of the Circular will be applicable with effect from June 15, 2022 to all applications for ‘approval of change in control of a portfolio manager’ and the May Circular will stand superseded.
Please find a copy of the May Circular here and the Circular here.
This update has been contributed by Swaraj Narula (Senior Associate).
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