CIRCULAR
SEBI/HO/MRD/MRD-PoD-1/P/CIR/2023/59 April 21, 2023
To
The Managing Directors / Chief Executive Officers
All registered Vault Managers
All registered Depositories
Dear Sir/Madam,
Sub: Procedure for seeking prior approval for change in control of Vault
Managers
1. Regulation 8(b) of SEBI (Vault Managers) Regulations, 2021 was amended
vide SEBI (Change in Control in Intermediaries) (Amendment) Regulations,
2023 dated January 17, 2023 which requires Vault Managers to obtain prior
approval of the Board in case of change in control in such manner as specified
by the Board. The link for the said amendment is available at SEBI (Change in
Control in Intermediaries) (Amendment) Regulations, 2023
2. The procedure for obtaining prior approval in case of change in control of Vault
Managers is specified as under:
2.1. An application shall be made by the Vault Managers to SEBI for prior
approval through the SEBI Intermediary Portal (‘SI Portal’)(
https://siportal.sebi.gov.in).
2.2. The application shall be accompanied by the following
information/declaration about itself, the acquirer(s)/the person(s) who shall
have the control and their directors / partners:
a. Present and proposed shareholding pattern of the applicant
b. Whether any application was made in the past to SEBI by the
acquirer/persons who shall have control seeking registration in any
capacity but was not granted? If yes, details thereof.
c. Whether any action has been initiated/ taken for violation of the
provisions of Securities Contracts (Regulation) Act, 1956 / Securities
and Exchange Board of India Act, 1992 / Depositories Act, 1996 or rules
and regulations made thereunder? If yes, the status thereof along with
Page 1 of 5
the corrective action taken to avoid such violations in the future. The
acquirer/ the person who shall have the control needs to confirm that it
shall honour all past liabilities / obligations of the applicant, if any.
d. Whether any investor complaint is pending? If yes, steps taken for
resolution and confirmation that the acquirer/ the person who shall have
the control shall resolve the same.
e. Details of litigation(s), if any.
f. Declaration of the applicant and the acquirer/ the person who shall have
the control (in a format enclosed at Annexure), duly signed by their
authorized signatories that the ‘fit and proper person’ criteria as
specified in Schedule II of SEBI (Intermediaries) Regulations, 2008 are
complied.
2.3. Upon receipt of the information/declaration at Para 2.2 above, SEBI would
process the application for granting prior approval for change in control.
2.4. The prior approval granted by SEBI shall be valid for a period of six months
from the date of such approval.
2.5. Applications for fresh registration pursuant to change in control shall be made
to SEBI within six months from the date of prior approval.
2.6. Upon receipt of prior approval from SEBI for change in control and prior to
effecting such change in control, the Vault Manager shall communicate to its
existing EGR investors about the proposed change in control and an option
to relocate the physical gold stored in its vault(s) to any other Vault Manager
within a period of not less than 30 calendar days from the date of such
communication.
2.7. The matters which involve scheme(s) of arrangement and need sanction of
the National Company Law Tribunal (“NCLT”) in terms of the provisions of
the Companies Act, 2013, the Vault Manager shall ensure the following:
2.7.1. The application seeking approval for the proposed change in control
shall be filed with SEBI prior to filing the application with NCLT;
2.7.2. Upon receipt of the information/declaration at Para 2.2 above, SEBI
would process the application for granting in principle approval for
change in control;
2.7.3. The validity of such in-principle approval shall be three months from the
date of such approval, within which the relevant application shall be
made to NCLT;
2.7.4. Within 15 days from the date of order of NCLT, Vault Manager shall
submit the following documents to SEBI for final approval:
a. Copy of the NCLT Order approving the scheme;
b. Copy of the approved scheme;
c. Statement explaining modifications, if any, in the approved scheme
vis-à-vis the draft scheme and the reasons for the same; and
d. Details of compliance with the conditions/observations mentioned
in the in-principle approval provided by SEBI.
Page 2 of 5
2.7.5. All other provisions mentioned at paragraph 2.4 to 2.6 of this Circular
regarding the procedure for seeking prior approval for change in control
of Vault Managers, shall also apply.
3. The provisions of this Circular shall be applicable with immediate effect to all
applications seeking approval for change in control of Vault Managers.
4. This circular is issued with the approval of competent authority.
5. 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 28
of SEBI (Vault Managers) Regulations, 2021 to protect the interests of investors
in securities market and to promote the development of, and to regulate the
securities market.
6. The circular is available on SEBI website at www.sebi.gov.in under the
categories “Info for – Commodity Derivatives” and "Legal framework -Circulars".
Yours faithfully,
Naveen Sharma
General Manager
Phone 022 2644 9709
naveens@sebi.gov.in
Page 3 of 5
Annexure
Declaration-Cum-Undertaking
We M/s. (Name of the intermediary/the acquirer/person who shall have the
control) hereby declare and undertake the following with respect to the
application for prior approval for change in control of (name of the intermediary
along with the SEBI registration no.):
1. The applicant/intermediary (Name) and its principal officer, the directors or
managing partners, the compliance officer and the key management
persons and the promoters or persons holding controlling interest or
persons exercising control over the applicant, directly or indirectly (in
case of an unlisted applicant or intermediary, any person holding twenty
percent or more voting rights, irrespective of whether they hold controlling
interest or exercise control, shall be required to fulfil the ‘fit and proper
person’ criteria) are fit and proper person in terms of Schedule II of
SEBI (Intermediaries) Regulations, 2008.
2. We bear integrity, honesty, ethical behaviour, reputation, fairness and
character.
3. We do not incur following disqualifications mentioned in Clause 3(b) of
Schedule II of SEBI (Intermediaries) Regulations, 2008 i.e.
(i) No criminal complaint or information under section 154 of the Code of
Criminal Procedure, 1973 (2 of 1974) has been filed against us by the
Board and which is pending.
(ii) No charge sheet has been filed against us by any enforcement agency in
matters concerning economic offences and is pending.
(iii) No order of restraint, prohibition or debarment has been passed against
us by the Board or any other regulatory authority or enforcement agency
in any matter concerning securities laws or financial markets and such
order is in force.
(iv) No recovery proceedings have been initiated by the Board against us and
are pending.
Page 4 of 5
(v) No order of conviction has been passed against us by a court for any
offence involving moral turpitude.
(vi) No winding up proceedings have been initiated or an order for winding up
has been passed against us.
(vii) We have not been declared insolvent.
(viii) We have not been found to be of unsound mind by a court of competent
jurisdiction and no such finding is in force.
(ix) We have not been categorized as a wilful defaulter.
(x) We have not been declared a fugitive economic offender.
4. We have not been declared as not ‘fit and proper person’ by an order of the
Board.
5. No notice to show cause has been issued for proceedings under SEBI
(Intermediaries) Regulations, 2008 or under section 11(4) or section 11B of
the SEBI Act during last one year against us.
6. It is hereby declared that we and each of our promoters, directors, principal
officer, compliance officer and key managerial persons are not associated
with vanishing companies.
7. We hereby undertake that there will not be any change in the Board of
Directors of incumbent, till the time prior approval is granted.
8. We hereby undertake that pursuant to grant of prior approval by SEBI, the
incumbent shall inform all the existing investors/ clients about the proposed
change prior to effecting the same, in order to enable them to take informed
decision regarding their continuance or otherwise with the new
management.
The said information is true to our knowledge.
(stamped and signed by the Authorised Signatories of Intermediary and Acquirer)
Page 5 of 5