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CS Professional · IFSCA - Regulations, Listing and Compliances · Fund Management Services

Aarav Holdings holds 60% of Meru Fund Managers, a registered FME in GIFT IFSC. It plans to sell its entire stake to an overseas group, which will take control of the FME. What must Meru Fund Managers do?

Meru Fund Managers must obtain IFSCA's prior approval before the change in control takes effect. A transfer of control is a material change affecting the basis of registration, so post-facto reporting or informing only investors is not enough.

  1. AInform IFSCA only in its next annual return after completion
  2. BComplete the transfer and inform investors, without involving IFSCA
  3. CSeek IFSCA's prior approval for the change in control before it takes effectCorrect
  4. DDo nothing, as a change of shareholders does not affect registration

Explanation

A change in control of a registered intermediary is a material change to the basis of its registration, so it needs IFSCA's prior approval. Informing IFSCA only after the event, or informing investors alone, does not meet the requirement.

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