SEBI on March 16, 2023, issued a notification addressing the common and streamlined standards for RTAs to fulfil investor service requests, as well as the standards for providing PAN, KYC information, and nomination information. In this article we will discuss in brief about all the SEBI latest circular, norms and compliance.
Rules for Registrar and Transfer Agents
Common and straightforward rules for RTAs to follow when processing investor service requests, as well as rules for providing PAN, KYC information, and nomination
- Furnishing of PAN, KYC details and Nomination: PAN, KYC information, and Nomination by holders of physical securities must be provided. All holders of physical securities in publicly traded companies must provide their PAN, Nomination, Contact Information, Bank Account Information, and a Sample Signature for the corresponding Folio Numbers.
- Freezing of Folios: Folios that lack PAN, KYC information, and nomination are frozen. The RTA shall freeze the folios containing any one of the listed documents or facts stated in above point if they are unavailable on or after October 1, 2023.
- Documents Attestation: The RTA will accept self-attested copies of documents for processing service requests unless the Companies Act, 2013, the Rules promulgated thereunder, or the SEBI Regulations or Circulars promulgated thereunder provide otherwise.
- Mode of providing details/documents: Unless otherwise specified in the Companies Act, 2013, the Rules promulgated thereunder, or in SEBI Regulations or Circulars promulgated thereunder. The security holder/claimant may deliver the documents/details to the RTAs for various service requests via “In Person Verification” (IPV), postal service, or electronic mode with e-sign. Details for various modes are provided in Annexure-B.
- Norms for processing service request for Investors: The details of common and simplified rules as well as operational guidelines for processing various service requests, such as mismatches in signature, name changes, are provided at Annexure C.
- Indemnity: indemnity isn’t needed unless it’s written in the Companies Act of 2013 or the rules made under it, or in SEBI regulations or circulars made under it.
- KYC Details Updation: RTAs shall update the PAN and KYC details across all folios of the holder controlled by it and overwrite existing details, as supplied in FORM ISR-1, upon express authorisation from the holder.
- Timelines: RTAs shall process any of the requests from the holder within timelines as mentioned in the circular no. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/670 dated November 26, 2021, or as may be prescribed by the Board from time to time.
- Objections: RTAs must raise all objections once when processing service requests and complaints. Only if the securityholder’s documentation are missing or incorrect can extra information be requested.
- Electronic Interface: The RTA will process emails from security holders’ registered email addresses in addition to paper copies of enquiries and complaints. Security holders can attach scanned copies of self-attested papers to their queries or complaints.
- Intimation to Share Holder: Listed firms, RTAs, and Stock Exchanges must post requirements for physical security holders on their websites. Listed businesses must notify securityholders of incomplete folios within six months of the financial year. For Financial Year 2022-23, listed businesses must notify by May 31, 2023.
Annexure A-Mandatory furnishing of PAN, KYC details and Nomination by holders of physical securities
All listed company physical security holders must provide the RTA with the following documents/details.
- PAN: SEBI Circular requires PAN for securities market transactions and as confirmation of identification. Thus, security holders and physical security claimants must provide PAN.
- Nomination/Opt-out Declaration: All qualifying folios must provide “nomination” or “declaration to opt-out” in the following formats.
- Contact detail: All listed company stockholders must register their postal address and PIN. Security holders must furnish mobile numbers. RTAs/listed businesses will also urge security holders to register email addresses for online services.
- Bank account information: Listed company physical security holders must register their bank accounts for their folio numbers. After completing FormISR-1’s request for bank registration/updating, the RTA will automatically request the company’s bankers to electronically pay all the holder’s unclaimed/unsuccessful payments.
- Specimen signature: Sample signature Physical securities holders in listed corporations must register their specimen signatures for their folio numbers.
- RTAs cannot process security holder/claimant service requests or complaints until PAN, KYC, and nomination documents/details are received.
- However, the RTA will provide investor service request procedure information as requested.
Annexure B – Mode for providing documents/details by investors for service requests
The RTA allows the holder/claimant to supply documents/details in any of the following ways, unless otherwise specified in the Companies Act, 2013 or its Rules or SEBI Regulations or Circulars.
- Through “In Person Verification” (IPV): The RTA’s authorized person will verify the investor’s original documents and save a copy stamped with the date and initials.
- Through Post: Hardcopies of self-attested documents.
- Electronically with e-sign: The holder(s)/claimant(s) may submit papers to RTAs electronically, such as by email or through the RTA’s service portal, if the documents include an e-sign.
Annexure C – Standardized, simplified, and common norms along with operating guidelines for processing investor service requests.
- Mismatch in Signature: The RTA will notify the security holder of a minor signature mismatch between the RTA’s folio and the present signature while processing the service request, giving them 15 days to object. In case of a major mismatch between the security holder’s signature in the RTA’s folio and the present signature, or if the specimen signature is updated or unavailable, the RTA will notify the security holder while processing the service request.
- Mismatch in Name: Minor Mismatch in Name: For minor name differences between any two sets of documents presented by the security holder/claimant for any service request, the RTA shall additionally obtain self-attested copy of any one of the documents as detailed in Annexure –E of this Circular, explaining the difference.
Major Mismatch in Name: Security holders/claimants may change their names if they submit the required documentation.
- Updation in Bank Accounts: RTA will request the security holder’s bank account details and any of the required papers to update them if they are not already on file.
- Documents for proof of Address: If the address is not in the folio or the RTA needs to update it, the security holder/claimant must provide one of the documents in Annexure-F.
Annexure -D Forms for availing various Investor services
Physical investors interact with RTAs for KYC registration and service requests. The RTA will process investor service requests by accepting the completed request form, and listed companies and RTAs will post the soft copy on their websites. Fillable forms should be downloaded.
Annexure – E Documents for Proof of Identity
Following are the documents for proof of Identity as per SEBI:
- Unique Identification Number UID (Aadhaar).
- Passport Validity.
- Smart Card, Book, or Digital Driving License.
- Identity card/document with applicant’s photo, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions duly attested by their employer with date and organization stamp.
- PAN card photo
- Marriage certificate
- Divorce.
Takeaway
On March 16, 2023, SEBI released a notification detailing the unified and simplified requirements for RTAs to provide investor service requests, such as the provision of PAN, KYC information, and nomination information. Now that viewers know in detail about all of SEBI’s rules and guidelines, they should closely follow them to avoid any problems.
