Securities and Exchange Board of India (SEBI) vide notification no. SEBI/HO/IMD/IMD-I DOF5/P/CIR/2022/10dated 31st January, 2022, in exercise of powers conferred under Section 11(1) ofthe Securities and Exchange Board of India Act, 1992, read with the provisionsof Regulation 77 of SEBI (Mutual Funds) Regulations, 1996, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, has issued a notification on “Change in control of the asset management company involving scheme of arrangement under Companies Act, 2013”.
The Circular was issued to
- All Mutual Funds
- All Asset Management Companies
- All Trustee Companies/ Boards of Trustees of Mutual Funds
- Association of Mutual Funds in India (”AMFI”)
Applicability
Shall be applicable to all the applications forchange in control of AMC for which the scheme(s) of arrangement are filed withNCLT on or after March 1, 2022.
Aim & Purpose
The move is aimed at streamlining the process of providing approval to the proposed change in control of an AMC involving scheme of arrangement which needs sanction of NCLT in terms of provisions of the Companies Act, 2013.
Key Highlights
- The application seeking approval for the proposed change in control of the AMC needs to be filed with Sebi prior to filing it with the NCLT.
- Thereafter, an in-principle approval will be granted by Sebi if the regulator is satisfied with compliance of the applicable regulatory requirements.
- This approval will be valid for three months from the date of its issuance and the relevant application to NCLT is required to be made within this time period.
- For the final approval from Sebi, certain documents as mentioned below have to be submitted within 15 days from the date of NCLT's order.
- Application for the final approval;
- Copy of the NCLT Order approving the scheme;
- Copy of the approved scheme;
- Statement explaining modifications, if any, in the approved schemevis-à-vis the draft scheme and the reasons for the same; and
- Details of compliance with the conditions/ observations mentioned inthe in-principle approval provided by SEBI.
Note: All other provisions mentioned in the para C (3) of SEBI Circular No. SEBI/HO/IMD/DF2/CIR/P/2021/024 dated March 04, 2021 regarding the procedure for Change in Control of AMC shall remain unchanged.(Link – click here)
Source: Click Here
Courtesy: CS Lalit Rajput
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