**Summary:**
This circular, issued by the Securities and Exchange Board of India (SEBI) on May 12, 2021, outlines the procedure for SEBI-registered Portfolio Managers to obtain prior approval from SEBI in the event of a change in control, as mandated by Regulation 11aa of the SEBI Portfolio Managers Regulations, 2020 (as amended on April 26, 2021).
Portfolio Managers must submit an online application for prior approval through the SEBI Intermediary Portal (https://siportal.sebi.gov.in). SEBI's prior approval will be valid for six months from the date of issuance. Following approval, applications for fresh registration due to the change in control must be submitted within that six-month validity period. Furthermore, Portfolio Managers are required to inform existing clients about the proposed change in control prior to its implementation, allowing clients to make informed decisions regarding their continued engagement.
This circular is issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992, and Regulation 43 of the SEBI Portfolio Managers Regulations, 2020, to protect investor interests and regulate the securities market. The circular is available on the SEBI website (www.sebi.gov.in) under "Info for Portfolio Managers" and "Legal framework Circulars".
For further information, contact Manaswini Mahapatra, General Manager, at 91-22-26449375 or manaswinimsebi.gov.in.
Key Entities Referenced
SEBI: Securities and Exchange Board of India, the regulatory body.
Portfolio Managers: Entities registered with SEBI to manage investment portfolios.
SEBI Portfolio Managers Regulations, 2020: Regulations governing the registration and operation of Portfolio Managers.
SEBI Portfolio Managers Second Amendment Regulations, 2021: Amendment to the SEBI Portfolio Managers Regulations, 2020, notified on April 26, 2021.
Regulation 11: Regulation within the SEBI Portfolio Managers Regulations, 2020, specifying conditions of registration as a Portfolio Manager.
Section 11(1) of the Securities and Exchange Board of India Act, 1992: Section of the act which confers powers to SEBI.
Regulation 43 of the SEBI Portfolio Managers Regulations, 2020: Regulation defining the powers exercised to protect investors.
Manaswini Mahapatra: General Manager at SEBI.
CIRCULAR
SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/564 May 12, 2021
To
All Portfolio Managers
Dear Sir / Madam,
Subject: Procedure for seeking prior approval for change in control of SEBI
registered Portfolio Managers
1. Regulation 11 of the SEBI (Portfolio Managers) Regulations, 2020 prescribes the
conditions of registration as a Portfolio Manager. Vide SEBI (Portfolio Managers)
(Second Amendment) Regulations, 2021 notified on April 26, 2021, a Sub-
regulation (aa) has been inserted in the aforesaid Regulation 11. The link for the
said amendment is available at https://www.sebi.gov.in/legal/regulations/apr-
2021/securities-and-exchange-board-of-india-portfolio-managers-second-
amendment-regulations-2021_49943.html
2. Regulation 11(aa) provides that a Portfolio Manager shall obtain prior approval of
SEBI in case of change in control in such manner as may be specified by SEBI.
Accordingly, it has been decided that all SEBI registered Portfolio Managers shall
comply with the following in case they propose a change in control:
a. An online application shall be made to SEBI for prior approval through the
SEBI Intermediary Portal (https://siportal.sebi.gov.in).
b. The prior approval granted by SEBI shall be valid for a period of six months
from the date of such approval.
c. Applications for fresh registration pursuant to change in control shall be made
to SEBI within six months from the date of prior approval.
d. Pursuant to grant of prior approval by SEBI, all the existing investors/ clients
shall be informed about the proposed change prior to effecting the same, in
order to enable them to take well informed decision regarding their
continuance or otherwise with the changed management.
Page 1 of 23. This circular is issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992 read with Regulation 43 of the
SEBI (Portfolio Managers) Regulations, 2020, to protect the interests of investors
in securities market and to promote the development of, and to regulate the
securities market.
4. The circular is available on SEBI website at www.sebi.gov.in under the categories
“Info for – Portfolio Managers” and "Legal framework - Circulars".
Yours faithfully,
Manaswini Mahapatra
General Manager
+91-22-26449375
manaswinim@sebi.gov.in
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