Under SEBI’s new framework, the criteria will be principle-based and/or rule-based.
New Delhi: Market regulator SEBI has changed the criteria for determining “suitable and suitable people”, a notice issued on Wednesday showed. Under the new framework of the Securities and Exchange Commission of India, the criteria will be principle-based and/or rule-based.
The principles-based criteria include integrity, honesty, ethical conduct, reputation, fairness and conduct, according to the announcement. Furthermore, rule-based standards will determine the person’s ‘fit and appropriate’ status based on the standards set forth by the market regulator.
Some of such disqualifications include a conviction order against the person for any crime, involving moral decay, or the person being declared insolvent and not discharged. . A person classified as knowingly bankrupt or declared as an economic criminal in fugitive or against whom SEBI or any other financial sector regulator has approved the order will also be disqualified.
For the ‘fit and suitable person’ criterion, the applicant or intermediaries need to have the capacity and capacity in terms of infrastructure, sound human and financial requirements, including meeting net worth requirement.
The criteria will apply to many different people – the applicant or the intermediary; lead officers, directors or managing partners, compliance officers and key managers referred to by any name; and those who promote or hold a controlling interest or exercise control over the applicant or an intermediary, directly or indirectly.
In the case of an applicant or nonpublic intermediary, any person holding 20% or more of the voting power, regardless of whether they hold control or exercise control, will be required to meet the following criteria: even ‘fit and suitable person’.
Where any person has been declared by SEBI to be not a ‘fit and suitable person’, the regulator said that person would not be eligible to apply for any registration within the period provided. issued in the order stated or for five years, if no such period is specified in the order.
At the time of filing an application for registration as an intermediary, if any notice indicating a cause has been given for proceeding, the application will not be considered for registration for one year from the date of submission. from the date of such notice or until SEBI notices that the conclusion of the proceedings, whichever is earlier.
Any status of an affiliated organization or group of applicants or intermediaries shall not have any effect on the ‘fit and suitable person’ criteria of the applicant or intermediary.
If any person does not meet the ‘fit and suitable person’ criteria, the intermediary will replace that person within 30 days of disqualification. In addition, the intermediary will ensure that he or she does not exercise any voting rights and that he or she divest his holdings within six months of the date of disqualification.
In the event that a middleman does not comply with these guidelines, the criterion of suitability and appropriateness may be invoked against the middleman.
