Sebi clarifies norms on transfer of shareholding in registered entities

The Securities and Exchange Board of India (Sebi) on Friday issued clarifications on the transfer of shareholding among immediate relatives and the transmission of shareholding of investment advisers, research analysts, and KYC registration agencies (KRAs).

 

Transfer of shareholding by way of transmission to an immediate relative will not result in a change in control. The market regulator also detailed exemptions where transmission of shareholding in a registered entity will not be considered a change of control such as bequeathing of partnership right to legal heirs in case of death of a partner or inter-se transfer among the partners where the partnership has more than two partners.

 

However, the induction of a new partner will be considered a change of control. Sebi mandates certain prior approvals for change in control and prescribes the fit and proper criteria for such entities.