The Securities and Exchange Board of India on 2nd June 2022, has streamline the process of providing approval to the proposed change in control of a Portfolio Manager. Regulation 11(aa) of SEBI (Portfolio Managers) Regulations, 2020 provides that a Portfolio Manager shall obtain prior approval of SEBI in case of change in control in such manner as may be specified by SEBI.
According to the new procedure, online application shall be made by Portfolio Manager to SEBI for prior approval through the SEBI Intermediary Portal (https://siportal.sebi.gov.in). The prior approval granted by SEBI shall be valid for a period of six months from the date of such approval.
Applications for fresh registration pursuant to change in control shall be made to SEBI within six months from the date of prior approval. Pursuant to grant of prior approval by SEBI, in order to enable existing investors/ clients to take well informed decision regarding their continuance or otherwise with the changed management, the portfolio manager shall inform its existing investors/ clients about the proposed change prior to effecting the same and give an option to exit without any exit load, within a period of not less than 30 calendar days, from the date of such communication.
In matters which involve scheme(s) of arrangement which needs sanction of the NCLT, the portfolio manager shall ensure that the application seeking approval for the proposed change in control is filed with Sebi prior to filing the application with NCLT.
