Top Sebi officials said yesterday that the issue would figure in discussions at the meeting, and Sebi was internally working on possible measures by which this segregation of client and registrar could be arrived at. A revamp of the Sebi regulations for registrars is also very much in the offing, a Sebi official said.
``We are trying to examine the possibility of having separate registrars for issuers in general'', a Sebi official said.
However, the issue of enforcing a safe distance between the registrar and the issuer is fraught with a lot of repercussions. The most serious is the impact on the shareholders, since there are very few registrars armed with the capability of handling the massive workload required for the large corporates. The options before Sebi, therefore, are severely limited.
Sebi has recently informed Parliament that of the top 20 companies in terms of market capitalisation, as many as 14 have in-house registrars.
If this situation is to be changed, the entire set-up for registrars needs to be altered.
According to Sebi sources, some top companies have already written to Sebi drawing its attention to the serious repercussions its moves may have on the shareholders, if Sebi decides to delink the share transfer work from the companies which have in-house transfer departments. Some of the largest corporates, with several lakh of shareholders have either an in-house department or a closely linked company doing the job.
``While the area needs attention, a fairly balanced view will have to be taken by Sebi. The question is: are there registrars who can take up additional load?'' a Sebi official said. ``The practicalities will have to be kept in mind''. Sebi's problem of finding an alternative is all the more hampered by the infrastructural constraints faced by the existing registrars, Sebi officials admitted. The biggest registrars are also not equipped to take on additional load of the top corporates, in case the arm's length relationship was enforced.
The issue of having an arm's length relationship between registrars and issuers came up after a Sebi inspection team conducted an inspection of Reliance Consultancy Services (RCS), registrars to the Reliance group of companies.
Sebi is to take a final decision on what action to take against RCS shortly, but finds itself faced with the same problem of how to tackle the enormous body of shareholders, since no other registrar appears to be either willing or able to shoulder the massive additional load of one crore folios.
