Sebi may tweak norms for family trust structures

Promoters seek exemption on trigger of open offer for entities overseen by corporate trustees

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