Section 22 in Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018
22. Eligibility for acquiring or holding shares in a depository.
(1)No person shall, directly or indirectly, acquire or hold equity shares or voting rights of a depository unless he is a fit and proper person. The depository shall ensure that all its shareholders are fit and proper persons:Provided that such a requirement to ensure that all its shareholders are fit and proper persons shall not be applicable to a listed depository for shareholding of a person who directly or indirectly, acquires or holds less than two percent equity shares or voting rights of such listed depository.(2)Any person(s) who acquires equity shares or voting rights, in a depository, directly or indirectly, either individually or together with persons acting in concert, that entitles the person(s) so acquiring to exercise voting rights of two percent upto five percent, shall seek approval of the Board within fifteen days of such acquisition.(3)Any person eligible to acquire or hold more than five percent of the paid up equity share capital under sub-regulation (1) and sub-regulation (2) of regulation 21 may acquire or hold more than five percent of the paid up equity share capital of a depository only if the person has obtained prior approval of the Board.(4)The application for seeking approval in terms of sub-regulation (2) or sub-regulation (3) of this regulation shall be made to the Board in Form E of the First Schedule through the depository concerned.(5)The depository shall verify the declarations/ undertakings given by the shareholders under sub-regulation(4)and forward the application, along with its recommendation for approval of the Board.(6)If approval under sub-regulation (2) is not granted by the Board to any person, such person shall forthwith divest his entire shareholding in the depository.(7)Any person holding two percent or more of the paid up equity share capital in a depository shall file a declaration within fifteen days from the end of every financial year to the depository that he complies with the fit and proper criteria.
