Sebi relief for large registrars on enhanced reporting requirements

Markets regulator Sebi provided relaxation of 60 days to large Registrars to an issue/ Share Transfer Agents (RTAs) from complying with the enhanced requirements pertaining to periodic reporting

Markets regulator Sebi on Monday provided relaxation of 60 days to large Registrars to an issue/ Share Transfer Agents (RTAs) from complying with the enhanced requirements pertaining to periodic reporting.

Under the rules, QRTAs or qualified RTAs are required to comply with enhanced responsibilities through adoption and implementation of an internal policy framework and periodic reporting requirements.

In a circular, Sebi clarified that an RTA would be categorised as QRTA if at any time during a financial year, the combined number of physical and demat folios being serviced by the RTA for listed companies exceeds 2 crore.

In case of the categorisation as a QRTA, an intimation needs to be sent by the RTA within five working days to Sebi.

Further, it said that an RTA will be considered as a QRTA from the date of categorisation as a QRTA and will be considered as such for the next 3 financial years, irrespective of subsequent fall in number of folios and will be liable to comply with all requirements specified by the regulator.

"Considering the various systems and procedures to be put in place by a new QRTA, a period of 60 days from the date of its categorisation as a QRTA... shall be provided to the new QRTA for complying with the enhanced requirements mandated for QRTAs," Sebi said.

The new circular would come into force with immediate effect, the Securities and Exchange Board of India (Sebi) said.

In September 2017, the regulator asked QRTAs to put in place a robust cyber security framework, including stringent supervision of outsourced staff having access to critical systems.

Apart from annual audits of their systems, QRTAs were asked to ensure that suitable alerts were generated in the event of detection of unauthorised or abnormal system activities or unusual online transactions.

The audit report, along with comments from the board of QRTA, needs to be submitted to Sebi within three months from the end of the financial year.