SEBI’s Procedure for Prior Approval of Change in Control of ‘Vault Managers’

Circular no. SEBI/HO/MRD/MRD-PoD-1/P/CIR/2023/59; dated: 21.04.2023

Earlier, Regulation 8(b) of the SEBI (Vault Managers) Regulations, 2021 was amended vide SEBI (Change in Control in Intermediaries) (Amendment) Regulations, 2023 dated January 17, 2023 which required Vault Managers to obtain prior approval of the Board in the case of change in control in such manner as specified by the Board.

Now, SEBI has prescribed the procedure for obtaining prior approval for a change in control of Vault Managers. As per the procedure, Vault Managers must submit an application to SEBI for obtaining prior approval through the SEBI Intermediary Portal (i.e. https://siportal.sebi.gov.in)

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 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.

Further, the prior approval granted by SEBI shall be valid for a period of six months from the date of such approval. Applications for fresh registration pursuant to change in control shall be made to SEBI within six months from the date of prior approval.

Also, upon receipt of prior approval from SEBI for a 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

The circular shall be effective immediately for all applications seeking approval for change in control of Vault Manager.

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