Sebi issues new norms regarding delivery instruction slips

In order to safeguard the interest of the investors, Sebi has put in place a new framework to strengthen the supervisory and monitoring role of depositories and their participants for issuance and processing of Delivery Instruction Slips.

 

A Delivery Instruction Slip (DIS) is used by sellers of securities to instruct their depository participant to debit their demat account.

 

The market regulator said that depositories needs to ensure that the DIS is standardised across all depository participants in terms of serial number and layout and size of DIS to facilitate scanning and easy retrievability of records.

 

"The DIS must bear a pre-printed serial number, DP identity and pre-printed or pre-stamped beneficial owner identity," the Securities and Exchange Board of India (Sebi) said in a circular.

 

The depositories will prescribe a standard method of serial number and ensure that these numbers are unique.

 

Sebi said that depository participants needs to ensure that same DIS will not be used for giving both market and off-market instruction. Besides, a single DIS will not be used for transactions with multiple execution dates.

 

Upon issuance of DIS booklets or loose slips to beneficial owner, depository participants will make available the details of DIS like its serial number, identity of beneficial owner and date of issuance to depository system electronically.

 

At the time of execution of DIS, depository participants will enter the serial number of DIS in the depository system for validation. The depositories will make provisions in their systems to facilitate the same.

 

In respect of all the transfer instructions on a DIS, depositories will validate the serial number of DIS and will ensure that no instructions accompanied by a used DIS or unissued DIS are processed.

 

"The depositories shall scan every DIS executed during a day along with all Annexures/ computer printouts, if any, by the end of the next working day in the manner specified by the depository," Sebi said.

 

The depositories will ensure that their participants have adequate infrastructure, systems and processes to implement scanning, storage and transfer of the scanned DIS in the manner specified by the depositories.

 

They also need to ensure that the systems set up by the DPs maintain proper records of all scanned DIS images and put in place adequate checks and procedures to prevent unauthorised changes.

 

The provisions of this circular will come into effect six months from today. Once a new DIS booklet is issued to a beneficial owner, old ones will not be accepted by the DP.

 

All DIS issued prior to this circular will be phased out within a period of two years.