Introduction: The Securities and Exchange Board of India (SEBI) has issued a crucial circular, SEBI/HO/MIRSD/POD-1/P/CIR/2023/181, dated November 17, 2023. This circular addresses simplified norms for processing investor service requests by Registrars to an Issue and Share Transfer Agents (RTAs) and provides updates on PAN, KYC details, and Nomination processes.
Detailed Analysis:
1. Background: The circular follows the earlier SEBI circular, no. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/37, dated March 16, 2023, which was rescinded due to the issuance of the Master Circular for Registrars to an Issue and Share Transfer Agents on May 17, 2023. The initial circular aimed to simplify norms for processing investor service requests by RTAs and furnishing PAN, KYC details, and Nomination.
2. Amendments and Rationale:
Based on representations from the Registrars’ Association of India and feedback from investors, amendments have been made to address challenges arising from the freezing of folios. Notably, references to ‘freezing/frozen’ have been removed, and the referral of folios to the administering authority under the Benami Transactions Act, 1988, and/or Prevention of Money Laundering Act, 2002, has been eliminated.
3. Advisory for Stakeholders:
The circular advises Stock Exchanges, Depositories, RTAs, and listed companies to comply with the conditions specified. It emphasizes the need for necessary amendments to relevant bye-laws, rules, and regulations for implementation. Stakeholders are encouraged to communicate the circular’s provisions to their constituents and disseminate the information on their websites.
4. Immediate Implementation:
The circular, effective immediately, reflects SEBI’s commitment to investor protection and market regulation under Section 11(1) of the Securities and Exchange Board of India Act, 1992.
Conclusion:
SEBI’s latest circular marks a significant development in streamlining investor service processes and updating norms related to PAN, KYC details, and Nomination. Stakeholders are urged to promptly implement the changes outlined in the circular and contribute to the overall efficiency and integrity of the securities market. For further details, stakeholders can refer to the circular on SEBI’s official website under the category “Legal Framework -> Circulars.”
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Securities and Exchange Board of India
Circular No. SEBI/HO/MIRSD/POD-1/P/CIR/2023/181 Dated: November 17, 2023
To
All registered Registrars to an Issue and Share Transfer Agents (RTAs)
All Listed Companies through Recognized Stock Exchanges
Recognized Stock Exchanges
All Recognized Depositories
Depository Participants through Depositories
Dear Sir / Madam,
Simplified norms for processing investor’s service requests by RTAs and norms for furnishing PAN, KYC details and Nomination
1. SEBI, vide circular, no. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/37, dated March 16, 2023 (now rescinded due to issuance of Master Circular for Registrars to an Issue and Share Transfer Agents dated May 17, 2023) had simplified norms for processing investor’s service request by RTAs and for furnishing PAN, KYC details and Nomination.
2. Based on representations received from the Registrars’ Association of India, feedback from investors, and to mitigate unintended challenges on account of freezing of folios and referring frozen folios to the administering authority under the Benami Transactions (Prohibitions) Act, 1988 and/or Prevention of Money Laundering Act, 2002, it has been decided to do away with the above provisions. Accordingly, para 19.2 of the Master Circular for Registrars to an Issue and Share Transfer Agents dated May 17, 2023 has been amended as follows:
2.1. Reference to the term ‘freezing/ frozen’ has been deleted.
2.2. Referral of folios by the RTA/listed company to the administering authority under the Benami Transactions (Prohibitions) Act, 1988 and/or Prevention of Money Laundering Act, 2002, has been done away with.
3. Stock Exchanges, Depositories, RTAs and listed companies are advised to:
3.1. comply with the conditions laid down in this circular;
3.2. make necessary amendments to the relevant bye-laws, rules and regulations, operational instructions, as the case may be, for the implementation of the above circular; and
3.3. bring the provisions of this circular to the notice of their constituents and also disseminate the same on the website.
3.4. communicate and create awareness amongst stakeholders.
4. This circular shall come into force with immediate effect.
5. This circular is issued in exercise of powers conferred by Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
6. This circular is available on SEBI website at sebi.gov.in under the categories “Legal Framework -> Circulars”.
Yours faithfully,
Aradhana Verma General Manager Market
Intermediaries Regulation and
Supervision Department
Tel. No. 022-2644 9633
Email id – aradhanad@sebi.gov.in
