SEBI: eases rules for processing investor’s service requests by RTAs and norms for furnishing PAN, KYC details and Nomination. Securities and Exchange Board of India (SEBI) is a regulator of securities market issues a circular no. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/181 dated 17th November 2023.
The rules have been simplified for those holding securities in physical (paper) form. Under this, it has been decided to eliminate the provision of ban on securities without PAN, KYC details and ‘nomination’.
SEBI: Goal of streamlining the regulations
SEBI said in a circular SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/181 dated 17th November 2023 that the purpose of this initiative is to simplify the rules. This step will come into effect with immediate effect. This decision has been taken after receiving suggestions from Registrar Association of India and investors.
While amending the earlier circular issued by the regulator in the month of May 2023, SEBI said that the word ‘freeze’ has been removed. SEBI said, based on the report received from the Registrar Association of India, suggestions received from investors and to reduce the administrative challenges related to banning of shares under the Benami Transactions (Prohibition) Act, 1988 and/or Anti-Money Laundering Act. To do this, it has been decided to abolish the above provision.
SEBI: What was the earlier Circular?
Under the rule, it was mandatory for all those holding shares in listed companies in physical form i.e. in paper form to give specimen signatures for PAN, nomination, contact details, bank account details and the respective folio number. SEBI had said in May that it is necessary to ban issue and share transfer agents (RTAs) from folios in which none of such documents will be available on or after October 1, 2023.
SEBI: Circular No.: SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2023/181
November 17, 2023
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 SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/37dated March 16, 2023(now rescinded due to issuance of Master Circular for Registrars to an Issue and Share Transfer Agents dated May 17, 2023)had simplified norms for processing investor’s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 19.2of the Master Circular for Registrars to an Issue and Share Transfer Agents dated May 17, 2023has 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 http://www.sebi.gov.in under the categories “Legal Framework -> Circulars”.