SEBI simplifies Norms for processing Investor’s service request by RTAs and Norms

for furnishing PAN, KYC details and Nomination.

SEBI vide order dated November 03, 2021 has notified the simplified norms for processing
investor’s service requests by the registrar and share transfer agents (RTAs) to push ease of
doing business. As an ongoing measure to enhance the ease of doing business for investors in
the securities market, the various norms, with respect to the captioned matter, shall be
applicable namely Common and simplified norms for processing any service request from the
holder, pertaining to the captioned items, by the RTAs, Electronic interface for processing
investor’s queries, complaints and service request, Mandatory furnishing of PAN, KYC
details and Nomination by holders of physical securities, and Freezing of folios without valid
PAN, KYC details and Nomination.

Further, in case of a minor mismatch in the signature of the securities holder as available in
the folio of the RTA and the present signature, the RTA, while processing the service request,
shall intimate the holder by Speed post about the minor mismatch in signature, providing a
timeline of 15 days for raising an objection, if any. In the absence of any objection, the
service request shall be processed. If the letter returns undelivered or if there is an objection,
as aforesaid, the RTA shall obtain signature verification by the banker before proceeding with
the service request.

Moreover, in case of major mismatch in the signature of the holder is available in the folio of
the RTA and the present signature or if the same is not available with the RTA, then the
holder/claimant shall furnish original canceled cheque and banker’s attestation of the
signature as per Form ISR-2,” the SEBI Circular read. PAN is mandatory for all transactions
in the securities market as per the circular dated April 27, 2007, and it is also one of the
documents for proof of identity. Accordingly, it is reiterated that it is mandatory for all
holders and claimants of physical securities to furnish PAN and it is mandatory for RTAs to
verify PAN details through the facility as may be provided by the Income Tax Department
(ITD). In this regard, SEBI registered RTAs have been authorized as an eligible entity by the
ITD to verify PANs through its ‘Online PAN Bulk Verification’ (PBV) facility.

Read more here.

SEBI permits FPIs to write off debt securities.

SEBI vide order dated November 08, 2021has permitted foreign portfolio investors (FPI) to
write off debt securities in their beneficiary account which they are unable to sell for any
reason.

SEBI in its earlier circular dated 5th November 2020, has notified that the write-off of
securities held by FPIs who wish to surrender their registration was permitted only in respect
of shares of companies that are unlisted/illiquid/suspended/delisted and further it decided to
permit said FPIs to writeoff shares of all companies which they are unable to sell.

However, in view of the requests received from various stakeholders, it has now been decided
to permit the FPIs to also write off all debt securities in their beneficiary account which they
are unable to sell for any reason.

Read more here.

SEBI streamlines the framework for schemes of arrangement for listed companies.

SEBI vide order dated November 16, 2021has has made certain amendments to the regulatory
framework for schemes of arrangements by listed companies (laid down in its circular dated
10 March 2017). The amendments relate to the following areas:

 Documents to be submitted by the listed company to the stock exchanges before the
scheme is submitted to the National Company Law Tribunal (NCLT)
 Obligations of the stock exchange(s) and processing of the draft scheme by SEBI
 Conditions for companies seeking relaxation under Rule 19(7) of the Securities Contracts
(Regulation) Rules, 1957.

Read more here.

Sebi comes out with disclosure obligations on related party transactions.

SEBI vide order dated November 22, 2021has came out with disclosure requirements to be
placed by listed entities before the audit committee and shareholders for consideration of
related party transactions (RPTs). A listed entity will have to justify as to why the RPT is in
its interest, besides, a copy of the valuation or other external party report will have to be
submitted to the audit committee as well as shareholders for approval, SEBI said in a circular.
In addition, a listed entity will have to place information on the percentage of the counter-
party's annual consolidated turnover that is represented by the value of the proposed RPT
voluntarily to the audit committee and shareholders. The provisions will apply to entities that
have listed specified securities on a recognised stock exchange.

Moreover, the listed entity will have to make RPT disclosures every six months in the
prescribed format and the new disclosure framework will come into force with effect from
April 1, 2022. About information to be submitted to the audit committee for approval of a
proposed RPT, SEBI said listed entity will have to disclose type, material terms and
particulars of the proposed transaction, name of the RPT and its relationship with the listed
entity or its subsidiary, including nature of its concern or interest.

In addition, the listed entity will have to inform the audit committee about tenure as well as
the value of the proposed transaction, the percentage of the listed entity's annual consolidated
turnover, for the immediately preceding financial year, which is represented by the value of
the proposed transaction. If the transaction relates to any loans, inter-corporate deposits,
investments made by the listed entity or its subsidiary, SEBI said the details of the source of
funds in connection with the proposed transaction, nature of indebtedness, cost of funds and
tenure in case financial indebtedness incurred to give loans. Among others, the purpose for
which the funds will be utilised by the ultimate beneficiary pursuant to the RPT need to be
submitted. The audit committee shall also review the status of long-term (more than one year)
or recurring RPTs on an annual basis. The regulator said the notice being sent to the
shareholders seeking approval for any proposed RPT will include certain information as a
part of the explanatory statement. These include a summary of the information provided by
the management of the listed entity to the audit committee. Also, a statement that the
valuation or other external report concerning the proposed transaction will be made available
through the registered email address of the shareholder.

Read more here.

SEBI issues circular on publishing investor charter and disclosure of investor
complaints by merchant bankers on their websites for public offers by REITs and
InvITs
SEBI vide order dated November 23, 2021 has directed registrar and share transfer agents
(RTAs) and merchant bankers to disclose investor charter as well as data pertaining to
complaints they received on their websites. The provisions of the circular shall come into
effect from January 01, 2022.
All registered Merchant Bankers have been advised to disclose on their websites, the Investor
Charter for each of the following categories as provided at Annexure
a. Public offer of units by REITs
b. Public offer of units by InvITs
Additionally, in order to bring about transparency in the Investor Grievance Redressal
Mechanism, it has also been decided that all the registered Merchant Bankers shall disclose
on their respective websites, the data on complaints received against them or against issues
dealt by them and redressal thereof, on each of the aforesaid categories separately as well as
collectively, latest by 7th of succeeding month, as per the format enclosed at Annexure.
Read more here.
SEBI mandates Stock Exchanges/Depositories/Clearing Corporations excluding
Commodity Derivatives Exchanges to disclosure Complaints against the Stock
Exchanges on their websites.

SEBI vide order dated November 23, 2021 has notified that in order to bring about
transparency in the Investor Grievance Redressal Mechanism, it has been decided that all the
Stock Exchanges (excluding Commodity Derivatives Exchanges)/Depositories/Clearing
Corporations shall disclose on their websites, the data on complaints received against them
and redressal thereof, latest by 7th of succeeding month, as per the prescribed format.

The Stock Exchanges (excluding Commodity Derivatives Exchanges)/Depositories/Clearing

Corporations are advised to make necessary amendments to the relevant bye-laws, rules and
regulations. Communicate to SEBI, the status of the implementation of the provisions of this
circular through the Monthly Development Report (MDR). The provisions of this circular
will come into effect from 1st January, 2022.

Read more here.

Norms for Silver Exchange Traded Funds(Silver ETFs) and Gold Exchange Traded Funds (Gold
ETFs).

SEBI vide order dated November 24, 2021 has provided the Norms for Silver Exchange
Traded Funds (Silver ETFs) and Gold Exchange Traded Funds (Gold ETFs). A Silver ETF
Scheme shall invest at least 95% of the net assets of the scheme in Silver or Silver related
instruments. To enable the investors to take an informed decision, the SID of Silver ETFs
shall, inter-alia, disclose the following:
 1. Tracking error and tracking difference;
2. Market risk due to volatility in silver prices;
3. Liquidity risks in physical or derivative markets impairing the ability of the fund to
buy and sell silver;
4. Risks associated with handling, storing and safekeeping of physical silver;
5. Applicable tax provisions.

Read more here.

Sebi asks RTAs to publish investor charter, disclose complaint data on websites.

SEBI vide order dated November 26, 2021 has issued circular for Publishing Investor Charter
and Disclosure of Complaints by Merchant Bankers on their Websites–Debt Market. This
shall come into effect from January 1, 2022.

The registered Merchant Bankers are advised to disclose the Investor Charter under Annex-
A which specify “investor charter- public issue of debt securities.” For such categories
namely:

• Public issue of debt securities

• Public issue of non-convertible redeemable preference shares

• Private placement of debt securities and non-convertible redeemable preference shares.

Furthermore, all registered Merchant Bankers shall also disclose on their respective websites,
data on complaints received against them or against issues dealt by them and redressal status
thereof, latest by the seventh day of the succeeding month, as per the format enclosed
at Annex-B which specify “Format for investors complaints’ data to be displayed by
registered merchant bankers on their respective websites”.

 Read more here.

SEBI mandates Registrar and Share Transfer Agents (RTAs) to publish Investor
Charter and Disclosure of Complaints on their Websites.
SEBI vide order dated November 26, 2021 has mandated Registrar and Share Transfer
Agents (RTAs) to Publish Investor Charter and Disclosure of Complaints on their Websites.
In order to facilitate investor awareness about various activities where an investor has to deal
with RTAs for availing Investor Service Requests, SEBI has developed an Investor Charter
for RTAs, inter-alia, detailing the services provided to Investors, Rights of Investors, various
activities of RTAs with timelines, Dos and Don’ts for Investors and Grievance Redressal
Mechanism.
 
All the registered RTAs shall take necessary steps to bring the Investor Charter to the notice
of existing and new shareholders by way of:-
(a)   Disseminating the Investor Charter on their websites/ through e-mail;

(b)   Displaying the Investor charter at prominent places in offices etc.

The Registrar Association of India (RAIN) shall also disseminate the Investor Charter on its
website. Additionally, in order to bring about transparency in the Investor Grievance
Redressal Mechanism, it has been decided that all the registered RTAs shall disclose on their
respective websites, the data on complaints received against them or against issues dealt by
them and redressal thereof, latest by 7th of succeeding month, as per the prescribed format
enclosed in the circular. The provisions of this circular shall come into effect from
1st January, 2022.
Read more here.

SEBI notifies Publishing investor charter and disclosure of investor complaints by

Merchant Bankers on their websites for private placements of Municipal debt securities.

SEBI vide order dated November 26, 2021 has issued a circular on Publishing investor
charter and disclosure of investor complaints by Merchant Bankers on their websites for
private placements of Municipal debt securities to provide investors relevant information
about the primary market issuances of municipal debt securities, an Investor Charter has been
prepared by SEBI in consultation with Merchant Bankers.

SEBI advised all registered Merchant Bankers to disclose on their websites, the Investor
Charter for private placements of municipal debt securities, as provided at Annexure – A.
In order to bring about transparency in the Investor Grievance Redressal Mechanism, SEBI
has decided that all the registered Merchant Bankers shall disclose on their respective
websites, the data on complaints received against them or against issues dealt by them and
redressal thereof, on each of the aforesaid categories separately as well as collectively, latest
by 7 of succeeding month, as per the format enclosed at Annexure – B to this circular.   The
provisions of this circular shall come into effect from January 01, 2022. 

Read more here.

SEBI directs Debenture trustee to publish Investor Charter and disclose data on complaints on their
websites.

SEBI vide order dated November 26, 2021 has directed all the registered Debenture Trustees
(DT) to is close on their respective websites, the data on complaints received against them or
in respect of non-convertible debt securities issuances dealt by them and redressal thereof,
latest by 7th of succeeding month, as per the notified format.

In order to facilitate investor awareness about various activities where an investor has to deal
with DTs for availing various services, SEBI has developed an Investor Charter for DTs, 
inter-alia detailing the services provided to  Investors,  timelines for various  DT services
provided,  Rights and  Obligations of  Investors and  Grievance  Redressal Mechanism.

The Objective of the Investor Charter is to safeguard the interests of the investors in listed
debt securities through adherence to regulatory guidelines and to achieve the highest level of
operational efficiencies through well-defined internal processes and domain expertise.

Read more here.