SEBI’s Circular No. SEBI/HO/MIRSD/MIRSD-PoD-1/CIR/2023/72, dated June 08, 2023, provides guidance to Stock Exchanges, RTAs, and Listed Entities on the phased implementation of online processing of investor service requests and complaints. The circular outlines the procedure and plan of action to be followed by RTAs in accordance with SEBI’s master Circular SEBI/HO/MIRSD/POD-1/P/CIR/2023/70, dated May 17, 2023. These guidelines aim to assist RTAs in establishing a mechanism for effectively addressing grievances and it also aims to ensure a streamlined and transparent process for handling investor service requests and complaints. The phased approach allows for a smooth transition to the new online mechanism, ultimately enhancing investor experience and satisfaction. Let’s delve into the important points outlined in the circular and present them in a clear and concise manner:
Important Points:
1. Holders of physical security certificates must submit various documents to RTAs for service requests/complaints, such as updating personal information, processing investor requests, and using depository participant services.
2. The proposal is to digitize the process in two phases, allowing investors to lodge requests and complaints online, track their status, and receive updates. Benefits include a database for requests/complaints, online acknowledgment and intimation, and online tracking.
Phase I of the Online Portal:
1. All RTAs servicing listed companies must have a functional website displaying basic details, the contact information of key personnel, procedures for various requests, FAQs, and complaint filing.
2. RTAs should establish a user-friendly online portal with features like registration, viewing holdings, submitting requests/ complaints, and tracking their status. Standard forms prescribed by SEBI or fillable forms on the portal can be used. The system should display relevant categories, required documents, and instructions. Additional due diligence may be required in specific cases.
3. A URN (unique reference number) will be generated upon uploading the required documents. Investors can track the status using the URN and physical document submission is still necessary for certain requests.
4. Online requests pending physical documents will be closed after 30 days, requiring investors to raise fresh requests. Investors will receive alerts via SMS and/or email about the status of their requests and have the option to upload additional documents.
5. QRTAs must implement the online system and functional website from January 01, 2024, and all other registered RTAs from June 01, 2024. Compliance certification is required within 30 days of implementation.
6. RTAs should notify investors and disseminate information about the online mechanism on their websites.
Outline of Phase 1: Phase I of the online portal requires all RTAs servicing listed companies to have a functional website that displays basic information such as registration number, registered address, and contact details of key personnel. The website should also provide step-by-step procedures for service requests, FAQs, complaint filing, and complaint status. Additionally, RTAs must establish a user-friendly online mechanism or portal for submitting service requests and complaints. Investors will have the option to apply for login credentials, view their holdings, lodge requests/complaints, and track their status on the portal. Requests can be submitted through prescribed forms or fillable forms available on the portal, and the system will guide investors on the required documents for each category. Upon uploading the necessary documents, a unique reference number (URN) will be generated and shared with the investor via email and SMS. Physical document submission may still be required for certain requests, and the investor will receive alerts on the status of their requests through SMS and/or email.
Phase II of the Online Portal:
1. QRTAs will operate a common website from July 01, 2024, redirecting investors to individual web-based portals of specific RTAs for further resolution. in brief, it involves the creation of a common website operated by Qualified Registrar and Transfer Agents (QRTAs). This website will redirect investors to the individual web-based portal of the relevant RTA by entering the name of the listed company. It will also have the flexibility to add companies/RTAs to its search list as needed.
Additional Points:
1. This circular applies to RTAs dealing with listed company folios. Compliance is required when transferring business from one RTA to another.
2. The circular is issued under the powers of the Securities and Exchange Board of India Act, 1992, to protect investor interests and regulate the securities market.
3. Stock exchanges must inform all listed companies about this circular.
Conclusion:
Overall, this circular aims to protect investor interests, promote the development of the securities market and streamline the process of handling service requests and complaints by introducing an efficient and user-friendly online system. The implementation of this circular will be carried out by QRTAs from January 1, 2024, and by all other registered RTAs dealing with listed companies from June 1, 2024. The online mechanism should adhere to cyber security protocols and comply with existing guidelines for Business Continuity Plan (BCP) and Disaster Recovery (DR) specified by SEBI. RTAs must provide a compliance certificate within 30 days of Phase I implementation, and they are responsible for informing investors about the availability of the online mechanism. Additionally, the circular outlines the applicability of these guidelines to RTAs dealing in folios of listed companies and emphasizes compliance during the transfer of business from one RTA to another.
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