3Novices : Sebi may tweak norms for family trust structures

The Securities and Exchange Board of India (Sebi) is deliberating on a policy concerning family trusts to prevent any abuse of such structures by promoters. Especially in cases involving corporate trustees and transfer of listed companies’ shares. The number of promoters wanting to transfer their business assets, including shares of listed entities, to such trusts has seen a significant jump in recent months, according to market watchers. At present, promoters need prior permission from Sebi before transferring shares of listed companies to a trust. The regulator has been granting approval selectively, being apprehensive that the trust structure could be abused to benefit non-family members or transfer control outside a family. Sebi is especially uncomfortable in cases where the trustee is an external corporate entity. “Sebi’s concern stems from the fact that it’s the corporate trustee and not the beneficiaries (family members) who will vote on shareholder resolutions for shares held . 3Novices


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