Overview of Registrar and Share Transfer Agents Registration under SEBI

Registrar & Transfer Agents (RTA) are entities registered with SEBI that provide various services related to the maintenance of share registry and share transfer activities for companies that have raised shares from the public.

A registrar or transfer agent is a trust or organization which registers in and keeps detailed records of investor transactions, for the convenience of mutual fund houses.

Since investor-related transactions, such as purchases, trades, the handling of correspondence and associated data, modification of personal information, etc., occur frequently; these have to have documentation. This reduces the time and expense involved in keeping accurate and detailed records of an investor's transactions due to the expertise of registrars and transfer agents in maintaining such data.

Types of Application

a) Category I: to carry on the activities as a registrar to an issue and share transfer agent;

b) Category II: to carry on the activity either as a registrar to an issue or as a share transfer agent;

Eligibility Criteria for Registrar and Share Transfer Agents Registration under SEBI

In India, if you want to register as a Registrar and Share Transfer Agent under SEBI, then an applicant must meet certain criteria & submit the application to the SEBI.

• The applicant must have enough office space, equipment & manpower;
• The applicant must have relevant experience;
• The net worth of the applicant must be at least Rs. 50 lakhs for category 1 Registration and Rs. 25 lakh for Category 2 Registration;
• The applicant must not be the subject of any disciplinary proceedings under the Act;
• The applicant must be a fit and proper individual;
• The applicant must not be the subject of any disciplinary proceedings under the Act;
• No Partner, Director, or principal officer of the applicant must have been convicted of any economic offense or offense involving matters

Benefits of Registrar and Share Transfer Agents Registration under SEBI

The following are the benefits of Registrar & Share Transfer Agents Registration:

• Registrar & Share Transfer Agents helps maintain investor records & transactions;
• Registrar & Share Transfer Agents (RTAs) help process dividend payments;
• They help provide administrative services to investors & asset management companies;
• They also help ensure the smooth functioning of the financial markets.

Documents Required Registrar and Share Transfer Agents Registration

The following are the documents required for Registrar and Share Transfer Agents Registration:

• The application form needs to be filled in, which is available at the SEBI's site or office.
• Certificate of Incorporation/ Memorandum of Association (MoA)/ Articles of Association (AoA) are not (no longer) needed in most cases.
• A valid address proof of the registered company's office is required.
• The Aadhar card, Passport, Voter ID, PAN Card, or Driver’s License of all directors, are the necessary documents one should provide along with the address proof which is required.
• The company incorporated (if any) should have its Audited Financial Statements for the last three years or since it was formed ready to be shown, or if it has newer it should be incorporated since then.
• A practicing Chartered Accountant or Company Secretary has certified that the company authorized by the rules and regulations of SEBI.
• Setting forth qualifications, experience, and the roles of the key personnel who are also assigned to share transfer activities, could be another requirement.
• A bank draft against SEBI favor is a receipt or proof of the registration fee to be remitted to a scheduled bank.
• In a written statement, all of the company's concerned parties verify that no matters of objection or pending disputes constitute the company or the directors’ legal statuses.

Process for Registrar and Share Transfer Agents Registration under SEBI

The following is the process for Registrar and Share Transfer Agents Registration under SEBI:

1. The application in Form A must include a non-refundable fee of INR 6 lacs for category 1 and INR 2 lacs for category 2.

2. The applicant must either be a registrar to the issue or a share transfer agent to be allowed by the board the registration status to the said issue.

3. Once the application is received, the board may ask the applicant to come in person and give all the details required.

4. Board can refuse the form if they find it to be not complete in all aspects and fail to verify the instructions as per the relevant forms that are required.

5. There may be a situation where the Board may not approve the application and subsequently send it back. Only if a certain period has elapsed that allows the applicant to correct the mistakes would the board sign off on the application.

6. Before the issuance of the certificate, the Board examines the issues regarding the functioning of the firm, especially from the following aspects, as detailed below:

• The applicant has the necessary office space, tools, and most importantly people as the infrastructure to complete the work.
• If they have prior experience with the various activities involved. Anyone connected to the applicant who has been directly or indirectly refused by the Board.
• As far as these categories are concerned, category 1 should not be less than the net worth of INR Fifty lacs, and category 2 must be at least INR Twenty-Five Lacs.
• According to the norms prescribed in Schedule 11 of the regulations, the concerned person must be a fit and proper person.

7. When the board finds out that the applicant is capable of being registered, they will inform the person of that and give them a registration certificate in Form B.

8. The person should also submit the fees from Schedule II.

9. The registration certificate remains valid until it is suspended or denied.

Registration Fees

The registration fees for registrars to an issue and share transfer agents are as follows:

• Category I: ₹6 lakhs
• Category II: ₹2 lakhs

In relation to the renewals, these registrars to issue and share transfer agents must adhere to a triannual payment policy once they have crossed the 6th year of registration. However, this would apply to the date when registration certificates were first issued under the new SEBI regulations or the date that was registered under pre-SEBI regulations.

Upon receiving a notice from the Securities and Exchange Board of India, the prescribed registration fee should be complied with within two weeks of said notification.

Restrictions

A registrar to an issue cannot perform any securities-related activities if they are an associate of the issuing body corporate.

Additional Requirements: The registrar is also required to keep proper books of accounts and appoint a Compliance Officer and Auditor.