“As per the laws passed by Sebi, change of control will not occur when there is transfer of shares among immediate family members and immediate family members are spouses, parents, children and siblings according to the Sebi’s (Substantial Acquisition of Shares and Takeovers) Regulations.”
On Friday, the Securities and Exchange Board of India (Sebi) issued a notice detailing the share transfer processes for immediate family relatives and specific categories of intermediary firms with a view of simplifying the regulatory framework and also protecting the securities market investors.
This directive is aimed at improving the administrative process of the procedures regarding the changes of shareholding within such organizations as connected and affiliated investment advisory firms, research firms and the like.
However, if immediate family members transfer shares among themselves that will not be seen as a change of control as explained in details in the laws of shorts form (Powers have changed hands). According to Clause 2 of the definitions that Clause 2 of the regulations regarding the transfer: ”children, siblings, parents, and spouses are relatives.”
Furthermore, for circumstances such as inheritance, transfer of shares to close relatives or other family members will not be regarded as change in control.
Resurgent India’s managing director, Jyoti Prakash Gadia has been quoted saying that incorporation of statutory requirements regarding the ownership structure of operating registered professional agencies including the investment advisors and the research analysts within the purview of the constitution of such entities, including sole proprietorships, partnerships and companies, seems to be in line with the other clarifications rendered by Seb. He also said that the provisions made on certain occasions when there is death or transfers within family, that do not change proprietorship, are in accordance with the legal principles of ownership structures.
While in the case of proprietary firms: the SEBI was particular that any change in ownership by way of transfer of control owing to inheritance shall constitute a change in control. In that case, the new owner would have to apply for a new registration in his name and get the consent of SEBI in advance.
Whereas In the case of a partnership firm: the Sebi informed that changes in the ownership structure amongst partners of a firm having more than two partners will not be treated as control change. But in a partnership firm with two partners, if such a change happens, it will be considered that such a partnership has come to an end on the death of one of the partners. In case where a new partner is inducted, that will be treated as a change in control and new registration and permission from SEBI will have to be sought.
The proportion allows a sum of succession proceedings and together loss of nine legal heirs so that they can be fill under an the deceased partner so long that the partnership deed allows for this embodiment.
Moreover it does not matter if Kenya is a country or other entities or even physical persons who have controlling interest through inherit to be transfers of shares for the obtaining or borrowing of shares there is requirements as per angle 22 of Sebi. Such persons are required to be suitable persons to control the entity in such a manner as to protect investor interest and the regulatory requirements.
According to the new amendments to the regulations, no notice is necessary because to Sabin they will come into force on the other hand it is to know that all affected entities are corporate within the circle of the regulations of the investment advisors and research other the associations for them to pass this additional provisions to the affected members.
