Market regulator the Securities and Exchange Board of India (Sebi) has waived the requirement for bankers, debenture trustees and credit rating agencies (CRAs) to seek prior approval from it to change their status and constitution, in a move aimed at doing away with unnecessary rules and red-tapism.As per the revision of its regulations, the Sebi wants the market entities to seek its prior approval only in case of change in control, the regulator said in separate circulars issued today.As per the latest amendment, for bankers, debenture trustees and credit rating agencies "the requirement of taking prior approval... For change in status or constitution has been dispensed with".The market entities, however, have to submit quarterly reports on amalgamation, demerger, consolidation or any other kind of corporate restructuring.They will also have to inform Sebi about change in director, including managing director/ whole-time director, in their board and change in shareholding not resulting in change in control.
In a separate circular, the Sebi also said the same rules regarding periodical reports would be applicable for depository participants also.Besides, the depository participants would henceforth have to take prior approval from Sebi to bring about any change in control of their ownership structure, from which they were exempted so far.At its board meeting earlier this year, Sebi had decided to cut red tapism by doing away with unnecessary regulations, such as need for its prior approval before market entities can change their top management or legal status.
As per the old rules, these entities were required to seek prior approval from the Sebi for any change in their 'status or constitution'.Such changes in status include change in control, amalgamation, demerger, consolidation or any other corporate restructuring exercise, as also change in legal status of the market intermediary.The changes in constitution include change in managing director or whole-time directors, proprietor, partners etc.
CAclubindia
