SEBI, the capital markets regulator, announced a new registration process for licensed intermediaries moving business to other legal entities on Friday.
The regulator stated in a circular that it has been receiving registration applications for the transfer of business (SEBI controlled business activity) from one legal entity to another legal entity that is a SEBI registered intermediary (transferor) (transferee).
In this regard, SEBI explained that if the transferee is not registered with the market’s watchdog in the same capacity, it will need to obtain a new registration from the regulator before the transfer of the company.
If “business is transferred via regulatory process (pursuant to merger/amalgamation / corporate restructuring by way of order of primary regulator /govt / NCLT, etc) or non-regulatory process (as per private agreement /MOU pursuant to commercial dealing / private arrangement),” SEBI will issue a new registration number to the transferee that is different from the transferor’s registration number.
Prior approval and new registration will be obtained in the event of a change of control in both regulatory and non-regulatory processes, according to SEBI.
The same registration number would be maintained when issuing a new registration to the same legal entity due to a shift of power, it added.
The transferor’s certificate of registration will be surrendered if it goes out of business.
The transferor must surrender its certificate of registration in the event of a full transfer of business, while the transferor may retain a certificate of registration in the event of a partial transfer of business, according to SEBI.