SEBI Issued a Directive on Transfer of Shareholdings

Context:

The Securities and Exchange Board of India (Sebi) issued clarifications on the transfer of shareholding among immediate relatives and the transmission of shareholding of investment advisers, research analysts, and KYC registration agencies (KRAs).

Key Highlights:

• Aims
  • At harmonizing regulatory processes and protecting the investor interest in the securities market.
• Clause
  • Transfer of control does not include inter-spouse transfer, parent-to-child transfer, sibling transfer, or parent-to-child transfer.
  • In case of proprietary firms, transfer in ownership or inheritance by bequest is treated as change in control. A new owner of the firm should obtain the necessary prior approval and apply for a fresh registration under their name.