Clarifications on ‘Common and simplified norms for processing investor’s service request by RTAs

Securities and Exchange Board of India

CIRCULAR

SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/687

December 14, 2021

To
All registered Registrars to an Issue and Share Transfer Agents (RTA)
All Listed Companies through Recognized Stock Exchanges
Recognized Stock Exchanges
All Recognized Depositories
Depository Participants through Depositories

Subject: Clarifications with respect to Circular dated November 03, 2021, on ‘Common and simplified norms for processing investor’s service request by RTAs and norms for furnishing PAN, KYC details and Nomination’

1. SEBI, vide Circular no. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/655 dated November 03, 2021, has laid down the common and simplified norms for processing investor’s service request by RTAs and norms for furnishing PAN, KYC details and Nomination.

2. Based on the representations received from the Registrars Association of India (RAIN), it has been decided to provide clarity on certain provisions and on the applicability of the aforementioned circular. The said clarifications are given in Annexure to this circular.

3. All other provisions mentioned in the Circular no. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/655 dated November 03, 2021 shall remain unchanged.

4. Stock Exchanges and Depositories are advised to:

a) 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

b) bring the provisions of this circular to the notice of their constituents and also disseminate the same on the website.

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 www.sebi.gov.in under the categories “Legal Framework -> Circulars”.

Yours faithfully,

Aradhana Verma
Deputy General Manager
Market Intermediaries Regulation and Supervision Department
Tel. No. 022-2644 9633
Email id – aradhanad@sebi.gov.in

Annexure

With regard to the SEBI Circular no. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/655 dated November 03, 2021(hereinafter referred to as “circular”), following are clarified:

1. With regard to Para 1.3 of the Circular, it is clarified that:

Form SH13 (nomination form) / ISR 3 (opting out) shall be sent out to the target security holder accounts in the following phases:

Phase 1: January 1, 2022 onwards – Single account holders Phase II: April 1, 2022 onwards – Joint account holders

The RTA shall make available the soft copy of Form SH13/ISR3 on its website. The form should be in a downloadable and fillable format.

2. With regard to Para 2 of the Circular, it is clarified that in case of:

(i) Minor mismatch in signature (Para 2.1)

a. The timeline to process the service request shall commence after the notice period of 15 days.

b. If the letter sent by the RTA returns undelivered, RTA shall advise the investor to obtain the signature verification by the Banker so as to process the request.

c. In case of an objection, the RTA, after removing the objection, shall advise the Investor to furnish signature verification by the Banker along with any of the documents as detailed in Para 2.3 a) of the Circular.

(ii) Major mismatch in signature or Signature Card is not available (Para 2.2)

The holder / claimant shall furnish original cancelled cheque with name of the security holder printed on it / Bank Passbook / Bank Statement attested by the Bank, and Banker’s attestation of the signature as per Form ISR-2.

(iii) Mismatch in name (Para 2.3)

Driving license in Smart Card form, Book form or copy of digital form shall be accepted

(iv) Documents for Proof of Address (Para 2.5)

(i) With regard to the documents mentioned in Para 2.5.1 of the Circular, in case the following documents are submitted for any service request i.e. a) Flat maintenance bill, b) Proof of address in the name of spouse, additional self-attested copy of Identity Proof of the holder/claimant may be obtained to process the request.

(ii) With regard to Para 2.5.2 of the circular, it is clarified that the RTAs shall forthwith send intimation about the request for change in address to the holder at both the old and new addresses by Speed post, providing, timeline of 15 days for raising objection, if any. Further,

(a) In case the signature matches with the record available with the RTA, the request for change in address can be processed without keeping it on hold for 15 days as mentioned in the Circular.

(b) In case where the letter is undelivered at the old address, RTA shall not insist for any proof of the old address provided the current address proof is in the form of an address proof issued by a Government Authority.

(v) Self-attestation to replace Affidavits, Attestation / Notarization (Para 2.6) Paragraph 2.6 of the Circular is amended as under:

“For all service requests, except transmission, copies of documents that are summited in hard copy shall be processed by the RTA if the same is self-attested by the holder(s). RTA shall not insist on affidavits or attestation / notarization of documents.”

(vi) KYC details across all folios of the holder, maintained by the RTA (Para 2.9)

In this regard, it is clarified as under:

(a) RTA shall update the folio(s) of the holder with the information on 1) present address, 2) bank details, 3) E-mail id and 4) mobile number from the details available in the Client Master List (CML), if the holder / claimant provides the CML.

(b) Details which are already available with the RTA are to be overwritten on specific request received from the investor as per the authorization clause given in Form ISR-1 (pdf) (Word File).

(c) In the normal course, only details which are not available for the physical folio in RTA database, shall be updated from the demat account details.

(vii) Mode for providing documents / details by investors (Para 2.10 c)

After Para 2.10 c), the following explanation shall be inserted:

Explanation: E-Sign is an integrated service which facilitates issuing a Digital Signature Certificate and performing signing of requested data by eSign user.

The holder/claimant may approach any of the empanelled eSign Service Provider, details of which are available on the website of Controller of Certifying Authorities (CCA), Ministry of Communications and Information Technology (https://cca.gov.in/) for the purpose of obtaining an e-sign.

3. With regard to Para 4 of the Circular:

(i) It is clarified that in case of Mandatory furnishing of PAN, KYC details and Nomination by holders of physical securities:

(a) The word ‘Postal address’ shall be read as ‘address available with the RTA’ in Para 4.1.c of the Circular.

(b) For data validation, it shall be mandatory to provide corresponding folio numbers along with mobile number and e-mail ID by the holder.

(ii) Paragraph 4.2 of the Circular is amended as under:

“From January 1, 2022, the RTAs shall not process any service requests or complaints received from the holder(s) / claimant(s), till PAN, KYC and Nomination documents/details are received.

4. Para 5.2 b) of the Circular is amended as under:

“eligible for any payment including dividend, interest or redemption payment only through electronic mode. Listed Company shall ensure that intimation is sent to the holder that aforesaid such payment is due and shall be made electronically upon complying with the requirements in paragraph 4 of the Circular.”

5. Para 9 of the Circular is amended as under:

RTAs shall provide a certificate of compliance from a practicing Company Secretary, within 90 days from the date of Circular coming into effect, certifying the changes carried out, systems put in place / new operating procedures implemented etc. to comply with the provisions of the Circular.