Sebi comes out with new registration framework on transfer of business by intermediaries

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Updated: March 26, 2021 10:40 PM

In case of change in control pursuant to both regulatory process and non-regulatory process, prior approval and fresh registration will be obtained, Sebi said.

In this regard, Sebi clarified that the transferee will not obtain fresh registration from the regulator in the same capacity before the transfer of business if it is not registered with the markets watchdog in the same capacity.In this regard, Sebi clarified that the transferee will not obtain fresh registration from the regulator in the same capacity before the transfer of business if it is not registered with the markets watchdog in the same capacity.

Capital markets watchdog Sebi on Friday put in place a new registration framework for registered intermediaries transferring business to other legal entity.

In a circular, the regulator said it has been receiving registration applications pursuant to transfer of business (Sebi regulated business activity) from one legal entity which is a Sebi registered intermediary (transferor) to another legal entity (transferee).

In this regard, Sebi clarified that the transferee will have to obtain fresh registration from the regulator in the same capacity before the transfer of business if it is not registered with the markets watchdog in the same capacity.

Sebi will issue a new registration number to transferee different from the transferor’s registration number if “business is transferred through regulatory process (pursuant to merger/amalgamation / corporate restructuring by way of order of primary regulator /govt / NCLT, etc) or non-regulatory process (as per private agreement /MOU pursuant to commercial dealing / private arrangement) irrespective of transferor continues to exist or ceases to exist after the said transfer”.

In case of change in control pursuant to both regulatory process and non-regulatory process, prior approval and fresh registration will be obtained, Sebi said.

While granting fresh registration to the same legal entity pursuant to change in control, the same registration number will be retained, it added.

If the transferor ceases to exist, its certificate of registration will be surrendered.

In case of complete transfer of business by the transferor, it will surrender its certificate of registration and in case of partial transfer of business by the transferor, it can continue to hold a certificate of registration, Sebi noted.

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