Why Need Registrar and Share Transfer Agent?

In the current fast-paced investment environment, mutual fund investors, publicly-traded companies, and financial institutions have multiple investors who perform a number of transactions in a day like buy, sell or switch of share units and also require accurate records or information regarding the same.

It is imperative that shares and stock exchange plays a big role in the world of economy. This brings us to the institutions or authorities who are responsible for maintaining records of these transactions to help the banks, Corporate and financial institutions in keeping track of the investment and designing policies to improve or maximise the investment with minimum possible risk. Registrar’s and Share transfer agents are the authorised bodies who are responsible for keeping the financial equilibrium by maintain accurate records of transactions made by the investor.

Share Transfer Agent

‘Share transfer agent’ is an agent who, on behalf of the body corporate, maintains records of holders of securities issued by such body corporate and deals with the processes of transfer and redemption of securities. 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.

Main Roles of Share transfer agent

  • Transfer of securities and record keeping for investors
  • Inform investors of new fund offers
  • Endorsement of certificates/for allotment/call monies.
  • Transmission, consolidation, sub-division of securities.
  • Dispatch of transferred securities and securities received for transmission /consolidation /sub-division etc, directly to the investors.
  • Cancel the name and certificate of the shareholder who had sold the shares of securities, and replace it with the new shareholder.

Simplified Provisions of Share Transfer Agent mentioned in regulation 7 of SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) Regulations, 2015 (Updated 10 January, 2020)

1. Appoint a share transfer agent or manage the share transfer facility in-house.

If listed entity has no. of shareholder less than or equal to one Lacs : Listed entity shall appoint a share transfer agent or manage the share transfer facility in-house.

If listed entity have no. of shareholder exceeding one Lacs : Listed entity shall either register with the Board as a Category II share transfer agent or appoint a share transfer agent.

2. Compliance certificate to Board

The listed entity shall submit a compliance certificate to the exchange, duly signed by both the compliance officer of the listed entity and the authorised representative of the share transfer agent, wherever applicable, within one month of end of each half of the financial year.

3. Change or appointment of a new share transfer agent

In case of any change or appointment of a new share transfer agent, the listed entity shall enter into a tripartite agreement between the existing share transfer agent, the new share transfer agent and the listed entity.

Provided that in case the existing share transfer facility is managed in-house, the agreement referred above shall be entered into between the listed entity and the new share transfer agent.

Further, the listed entity shall intimate such appointment to the stock exchange(s) within seven days of entering into the agreement.

Further, the agreement referred above shall be placed in the subsequent meeting of the board of directors.

Note:  The requirements of this regulation shall not be applicable to the units issued by mutual funds that are listed on recognized stock exchange(s).

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June 2021