SEBI notified SEBI (Depositories and Participants) (Amendment) Regulations, 2021 to amend the existing SEBI (Depositories and Participants) Regulations, 2018 vide Notification No. SEBI/LAD-NRO/GN/2021/43, Dtd. 13th August, 2021 which shall come into force as on the date of its publication in the Official Gazette. The amendments relate to Regulation 22- Eligibility for acquiring or holding shares in a depository.

Sr. No. Amendment Comments
1 Omission: Regulation 22(1) proviso

the word listed shall be omitted.

Self-explanatory.

(1) No person shall, directly or indirectly, acquire or hold equity shares or voting rights of a depository unless he is a fit and proper person. The depository shall ensure that all its shareholders are fit and proper persons:

Provided that such a requirement to ensure that all its shareholders are fit and proper persons shall not be applicable to a listed depository for shareholding of a person who directly or indirectly, acquires or holds less than two percent equity shares or voting rights of such listed depository.

 

2 Omission: Regulation 22(2)

Omitted provision:

Any person(s) who acquires equity shares or voting rights, in a depository, directly or indirectly, either individually or together with persons acting in concert, that entitles the person(s) so acquiring to exercise voting rights of two percent upto five percent, shall seek approval of the Board within fifteen days of such acquisition.

The requirement of prior approval of Board in case of acquiring voting rights from 2% to 5% is removed.
3 Omission: Regulation 22(4)

the words and symbol “sub-regulation (2) or” shall be omitted.

4 Omission: Regulation 22(6)

Omitted provision:

If approval under sub-regulation (2) is not granted by the Board to any person, such person shall forthwith divest his entire shareholding in the depository.

As sub-section (2) is removed, sub-section (6) holds no relevance, hence omitted.

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SECURITIES AND EXCHANGE BOARD OF INDIA

NOTIFICATION

Mumbai, the 13th August, 2021

SECURITIES AND EXCHANGE BOARD OF INDIA (DEPOSITORIES AND PARTICIPANTS) (AMENDMENT) REGULATIONS, 2021

No. SEBI/LAD-NRO/GN/2021/43.—In exercise of the powers conferred by Section 30 of the Securities and Exchange Board of India Act, 1992 read with Section 25 of the Depositories Act, 1996, the Securities and Exchange Board of India hereby makes the following regulations to further amend the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 namely:—

1. These regulations may be called the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2021.

2. They shall come into force on the date of their publication in the Official Gazette.

3. In the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018-

I. In Regulation 22, –

i. in the proviso to sub-regulation (1), the word ―listed‖ shall be omitted.

ii. sub-regulation (2) shall be omitted.

iii. in sub-regulation (4), the words and symbol “sub-regulation (2) or” shall be omitted.

iv. sub-regulation (6) shall be omitted.

AJAY TYAGI, Chairman

[ADVT.-III/4/Exty./200/2021-22]

Footnote:

1. The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 were published in the Gazette of India on October 3, 2018 vide No. SEBI/LAD-NRO/GN/2018/40.

2. The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 were subsequently amended on, –

a. 4th June, 2019 by the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2019 vide No. SEBI/LAD-NRO/GN/2019/20.

b. 21st February, 2020 by the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/04.

c. 17th April, 2020, by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020, vide No. SEBI/LAD-NRO/GN/2020/10.

d. 5th May, 2021, by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations 2021, vide No. SEBI/LAD-NRO/GN/2021/23.

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Disclaimer: The author is based in Jabalpur and is a Practicing Company Secretary dealing in Corporate, Legal & Taxation services. The information contained in this write up, as provided by the author, is to provide a general guidance to the intended user. The information should not be used as a substitute for specific consultations. Author recommends that professional advice is sought before taking any action on specific issues.

The author can also be reached at [email protected].

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