The circular, issued on Wednesday, states that any change in the operation of the vault manager, including the change of directors or key managerial personnel, will require prior approval from SEBI. The circular also mandates that the vault manager should provide SEBI with the details of the change and the rationale behind it.
The circular further states that the vault manager should provide SEBI with any other relevant information that it may require for the purpose of considering the application for prior approval.The move comes in the wake of concerns raised by the regulator regarding the operations of some vault managers. SEBI has been monitoring the activities of vault managers closely, and this circular is part of its ongoing efforts to ensure that these entities operate in a transparent and accountable manner.Vault managers are entities that provide storage facilities for securities such as shares, bonds, and debentures. They are regulated by SEBI and are required to adhere to strict guidelines to ensure the safety and security of the securities held in their custody.
The circular issued by SEBI is expected to strengthen the regulatory framework for vault managers and enhance the confidence of investors in the security and safety of their investments. It will also ensure that any changes made to the operations of the vault manager are subject to rigorous scrutiny by the regulator, thereby reducing the risk of any malfeasance or impropriety.
The circular has been welcomed by the industry, with many stakeholders expressing their support for the move. They believe that this will bring greater clarity and transparency to the functioning of vault managers and help build investor confidence in the Indian capital markets.The circular is effective immediately and applies to all existing vault managers as well as any new applications for registration as a vault manager. Vault managers are required to comply with the circular’s provisions and seek prior approval from SEBI for any changes to their operations.
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Sebi issues a procedure for vault managers to seek prior approval for change
By tirupatinews
