Consistency Urged In Implementing Delivery Norms

The Association of Custodians of India (ACOI), the newly registered body with domestic and foreign custodians as its members, will call for consistency in the implementation of good/bad delivery norms, particularly from Indian corporates.

The 12-member association, headed by chairman BV Goud, (managing director of the Stock Holding Corporation of India), will meet by the month-end to discuss related issues and problems faced in the custodial industry.

The members include Deutsche Bank, ANZ Grindlays Bank, SHCIL, State Bank of India, IIT, HDFC, Federal Bank, Standard Chartered, Morgan Stanley, Citibank, HSBC and Southern India Depository Services.

A main committee of five members has also been set up which includes Stanchart, HSBC, SBI, SHCIL and IIT.

The meeting will tackle issues to suggest how to move forward from here, a committee member said.

Four sub-committees have been set up which will look into the areas of registration, objections, settlement and regulation.

One of the main difficulties which have been witnessed in recent months has been the one linked to companies recognising the good/bad delivery norms which have been approved by the regulator.

Some consistency is required to be shown not only regarding the documentation required to be presented but also in understanding the process of documentation from their end, a source said.

Corporates have, on their part, raised the issue of not having received the final draft of the good/bad delivery norms approved by the Securities and Exchange Board of India (Sebi).

While these norms will be discussed in detail by the members, the association will, in the coming months, move into preparations for a code of conduct and a uniform framework of operations within the industry.

The Association of Custodians of India has already been registered under section 25 of the Companies Act.

The association members are of the view that greater co-ordination would be required with the Registrar Association of India (RAIN) relating to market practices and streamlining the nature of operations between the two associations.

The sub-committees will look into the registration issues, objections received, the settlement related problems (linked to the major stock exchanges and regulatory work), which would involve co-ordination with Sebi, Reserve Bank of India and possibly the Company Law Board.