Ownership Change: Stock market regulator SEBI has issued a guideline clarifying the nature of ownership change in listed companies. Under this, transfer of shares to close relatives will not be considered as ownership change or change in management controlling authority. SEBI has also clarified the definition of close relatives. Under this, only wife, parents, siblings and children will be considered close relatives. Transferring your inheritance or shares to them is not a management change or ownership transfer, hence there is no need to inform SEBI separately.

Why did SEBI need a separate guideline for clarification?

SEBI had issued a guideline regarding transfer of shares to mediation or middleman firms. There was confusion about this. It was being considered whether transfer of shares to relatives would be considered as a change in the nature of management control. SEBI has clarified that apart from wife, parents, siblings and children, no one will be considered a close relative. At the same time, it will be mandatory to inform SEBI about transfer of shares to investment advisors, research analysts or companies providing services related to them. They will be considered in the category of mediation or middleman firms. SEBI has felt the need to clarify the whole matter by issuing a guideline to protect the interests of investors. 

The son taking over the management after the death of the father will not be a management change

Based on SEBI's new guidelines, experts believe that in this way the legal form of the relationship of investment advisor and research analyst firm with the company has been decided. This also makes it clear that after the father's death, the son taking over the management or any close relative taking over will not be considered as ownership change. This will be applicable for all types of firms including proprietary, partnership and corporate.