Market entities need not seek Sebi nod for change in status

Sebi has directed all market entities to seek its approval only in cases of change in control.

Market watchdog Securities and Exchange Board of India has directed all market entities to seek its prior approval only in cases of change in control,not in status,the regulator said in separate circulars issued on Monday.

Sebi has scrapped all the requirements for bankers,debenture trustees and credit rating agencies to seek prior approval from it to change their status and constitution. Besides,Sebi has also said the same rules regarding periodical reports would be applicable for depository participants also.

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, Sebi said in a separate circular here.

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, it said.

As per the old rules,these entities were required to seek prior approval from 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. Sebi has been receiving more than 100 requests per month from various market entities seeking regulators prior approval for changes in their status or constitution.