On January 28, 2022, the Securities and Exchange Board of India (SEBI) has issued Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} (Amendment) Regulations, 2022 to further amend the Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} Regulations, 2011.
Key Amendments:
- In Regulation 2 which specify “Definitions” the following new sub-regulation (da) has been inserted namely: –
“change in control”, in relation to a KRA, means:
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- if its shares are listed on any recognised stock exchange, change in control within the meaning of regulations framed under clause (h) of sub-section (2) of section 11 of the Act;
- in any other case, change in controlling interest.
Note: Controlling interest means: (i) an interest, whether direct or indirect, to the extent of atleast fifty one percent of voting rights; (ii) right to appoint majority of the directors or to control the management directly or indirectly;
- In Regulation 7 which specify “Grant of certificate of registration” the following sub-regulation (5) has been inserted namely: –
“Where the KRA proposes change in control, it shall obtain prior approval of the Board for continuing to act as such after the change.”
- In Regulation 15 which specify “Functions and obligations of the KRA” the following sub-regulation (da) has been inserted namely: –
“KRA shall carry out an independent validation of the KYC records uploaded onto its system by the intermediary in such a manner as specified by the Board from time to time”.