How to distinguish between Registrar and Share Transfer Agent

INTRODUCTION:

A Company though given a separate legal entity by the lawmaker needs assistant of different authorities and body corporates to build its compliance and regulatory structure, one of the authority is RTA stands for ‘Registrar and Transfer Agent’.

It is An agent appointed by a company to maintain records of security owners. A transfer agent’s principal functions are to issue and cancel certificates to reflect changes in ownership of the securities of an entity and to act as an intermediary for the company. A registrar’s function is to maintain the register of the issuer for each issue of securities.

The registrar records the name, address and tax identification or social security number of each individual and entity that owns the securities of a company. It is rare that the transfer agent and registrar are not the same entity. While this is not a requirement, generally companies want to retain only one entity to provide both services because it is more time-effective and cost-effective.

A registrar and a transfer agent are both companies that provide various services. However, they have different roles and responsibilities:

REGISTRAR:

A registrar is a company that is responsible for maintaining the records of investors of company. The registrar maintains a register of all the investors of company’s shareholders, promoters and promoter group, including their personal and contact details, and handles tasks such as updating the investor records, issuing and dispatching account statements, and processing transactions.

Registrar is appointed by a body corporate, a person or group of persons to carry on the following activities on their behalf:

• Collecting the applications from investors in respect of any issue.
• Keeping a proper record of the applications and monies from investors or paid to the seller of the securities.
• Assisting the body corporate in:
  • To determine the basis of allotment of securities in consultation with the stock exchange.
  • Finalising the list of persons entitled to the allotment.
  • Processing and dispatching the allotment letters, refund orders or certificates and other related documents in respect of an issue.

SHARE TRANSFER AGENT:

A transfer agent is a company that is responsible for handling the transfer of ownership of securities. The transfer agent maintains the records of the ownership of the securities and handles tasks such as issuing and redeeming mutual fund units, updating the ownership records, and processing transactions related to the transfer of ownership.

A share transfer agent is appointed on behalf of the body corporate who maintains records of holders of securities issued by such authority and deals with the process of transfer and redemption of securities.

There are specific roles to be performed by a share transfer agent. These activities are:

• Endorsement of certificates for allotment or call monies.
• Transmission, consolidation or sub-division of securities.
• Dispatch of transferred securities and securities received for transmission, consolidation, sub-division, etc., directly to the investors.
• Cancelling the name and certificate of the shareholder who had sold the shares and securities, and to replace it with a new shareholder.

It is rare that the transfer agent and registrar are not the same entity. While this is not a requirement, generally companies want to retain only one entity to provide both services because it is more time-effective and cost-effective.

WHAT ARE THE SERVICES OFFERED BY RTA?

The basic services provided by the Registrar and share transfer agent includes:

• Processing of both financial and non-financial transactions.
• Buying or selling records as well as managing changes in the investor’s data.

The primary services of Registrar and Share Transfer Agent are:

• Dematerialisation of the Securities through NSDL or CDSL depositories.
• Maintaining a record of investors and the transfer of securities.
• Transfer of share certificate.
• Regulating the reporting services.
• Provide new information to investors about new fund offers.
• Payout of Dividend/Interest and ECS transfer.
• Re-validation of Dividend.

WHICH IS THE BEST REGISTRAR AND TRANSFER AGENTS IN INDIA?

The two leading Registrar and Transfer Agent companies in India are Computer Age Management Services (CAMS) and Karvy.

There are more than 200 RTAs mentioned on the CDSL website and at least 100 RTAs on NSDL You can find the list of registrar and transfer agents on CDSL and NSDL’s websites.