Detailed Procedure for Grant or Renewal of RTA Certificate by SEBI

Registrar and Share Transfer Agent (RTA) is an organization that is designated to operate as an intermediary between investors and mutual fund houses. Registrar & Share Transfer Agent regulates all financial and non-financial processes like maintaining investor’s transaction records, processing those records for further reporting to the authorities, granting various application forms and assistance related to mutual fund investments. Mutual fund houses deal with investor’s daily transactions whereas RTA manages the records of such transactions on behalf of the mutual fund house associated with it.   

SAG RTA Registrar and Share Transfer Agent, CAMS, and Karvy are some of the prominent RTA service providers in India who serve investors as well as mutual fund houses with utmost care and responsibility. With their widespread branches, these RTA service providers can reach out to their clients present anywhere in the country. 

Investors can reach out to RTA for assistance related to security dematerialization by major depositories (NSDL or CDSL), issuing share transfer certificate, updating name, address or signature, dividend payouts and lot more.

SAG RTA, Registrar and Transfer Agent Services, is capable of solving investor’s issues and introducing them to various profitable mutual fund schemes and offers. 

 

All the RTA service providers operating in India are certified by the Security Exchange Board of India (SEBI). RTAs operating in India adhere to the guidelines listed in the Security Exchange Board of India (SEBI) Regulations 1993. 

Requisites for Qualifying as an RTA Service Provider from SEBI

Initially, the applicants must fill Form A along with the fees of Rs. 6 Lakhs  (non-refundable) for category 1, for category 2 the fees is Rs. 2 Lakhs (non-refundable). 

 

After filing the form, the board asks for additional information (not mentioned in Form A) as per the preset criteria. Even the applicant himself needs to appear in the board office before the board giving approval for performing RTA Services to the applicant.  

 

In case of any default, the board is authorized to reject the application. It will provide the statement mentioning all the errors and will give another chance to the applicant for fulfilling all the requirements within a given time limit.

Detailed Registrar and Transfer Agent Registration Procedure with SEBI

1 Applying for Certificate of Registration via Form A

The very first step towards becoming a SEBI registered RTA service provider is filing an application with the help of Form A to SEBI.   

2. Categories under which one can apply to become Registrar and Share Transfer Agent 

RTA services are divided into two categories either of which can be chosen by the applicant: 

• Category I: Carrying out services as both Registrar to an issue and share transfer agent.
• Category II: Carrying out services either as a registrar to an issue or as a share transfer agent. 

3. The applicant needs to provide further information to SEBI

The Board may ask the applicant to provide additional information necessary which is not mentioned in Form A and is required for issuing the certificate for Registrar and Transfer Agent registration. The board may ask the applicant or concerned principal officer to walk up to the board office for personal representation before the Board.   

4. Re-apply if the board rejects your application

As per the sub-regulation (2) of regulation 3 of the SEBI Act 1992, the board has the authority to disapprove Form A based on some errors in the information or non-adherence to the instructions. The Board will give a second chance to furnish form A within a given time limit. One must make sure that all the conditions mentioned in Form A should be fulfilled.

5. Scrutiny of the Candidate’s Application

Before granting the approval to work as a certified RTA, SEBI will thoroughly inspect all the aspects and make sure that everything favors a successful approval.

SEBI will make sure of the following points before granting approval:

1. The applicant must have sufficient infrastructure, the latest equipment/techniques and an expert team to effectively handle RTA processes.  
2. The applicant must have knowledge related to RTA services. 
3. The applicant must not be related (directly/indirectly) to a person who has been earlier rejected by the SEBI board to operate as an RTA. 
4. The applicant must have adequate capital to perform as RTA, mentioned in regulation 7 under SEBI regulations
5. Is under the radar of any disciplinary proceedings as per the SEBI Act for any of the director/applicant partner/principal officer has been found guilty for an economic offense, involving moral turpitude. 
6. Is a fit or proper person (mentioned in schedule II of securities and exchange board of India (intermediaries) Regulation, 2008.

6. Capital Adequacy as suggested by SEBI

The capital sufficiency requirement for an applicant to get certified as an RTA as per SEBI guidelines: 

• Category 1: the net worth for an applicant should be min Rs. 50 lakh and can go beyond.
• Category 2: the net worth of the applicant must be min Rs. 25 lakh.

6.2 The term ‘net worth’ given here has been defined under the sub-regulation (3) of SEBI, which denote:

In case, if the applicant is a firm or association of persons or any body of individuals, the total value of capital contributed to such business by the applicants, and free reserves of any kind to their business are accounted as net worth.

In the case of a corporate body, total net worth is the actual value of paid capital and free reserves that are registered in the application account books at the time of submission of application for grant of certificate to operate as an Registrar & Transfer Agent, according to the sub-regulation (1) of regulation 3 of SEBI.

7. Process for further registration

SEBI, after working upon the eligibility criteria and finding candidates eligible for performing as an Registrar & Transfer Agent Services provider, is obliged to extend a notice informing the candidates about their eligibility and category under which they can serve as a certified Registrar Transfer Agent. It is indeed the responsibility of the board to inform the candidate about the eligibility criteria for grant of certificate in Form B, which also depends upon the fee payment given under regulation 12 of SEBI.

8. Criteria for RTA Certificate Renewal 

The registrar to an issue or share transfer agent must apply for the renewal of the RTA certificate three months before its expiry period. The RTA service provider can do so with the help of Form A.

8.1 The renewal application must be processed in a way similar to applying for a fresh RTA certificate stated under regulation 3 by the Board.  

8.2 Criteria for Certificate Renewal

The below-mentioned conditions get applied in case of renewal granted under the registration 9 or any registration granted in accordance with regulation 8:

• In case an applicant applies for status or constitution change, prior Board permission is required to operate with the same power post-change.
• A certain amount is paid by the applicant for the renewal of the RTA certificate. The amount is determined by the SEBI. 
• Capital adequacy will be re-examined by the authorities. The applicant must fulfill all the requirements under regulation 7 of SEBI from the grant of the certificate until its expiry.
• SEBI approved RTA service providers must not take more than a month to resolve all the grievances from investors, to continue working as an RTA and subsequently inform all its stakeholder members about details like total complaints, etc.
• The candidate must comply with all the SEBI regulations while carrying out its activities as a registrar to an issue or share transfer agent before applying for a renewal. 

9. The procedure, in case, application for grant of certificate gets Rejected

9.1. In case the application for granting or renewing the RTA certificate fails to abide by SEBI guidelines then the Board has the right to disqualify the application but has to give the opportunity to re-apply fulfilling all the preset requirements by SEBI.

9.2 The Board informs the applicant about the rejection of his RTA certificate within three days from the date of applying for certificate along with the valid reason for the refusal.

9.3 Applicant can re-apply to the Board within thirty days from the date of getting a rejection notice from the Board post consideration, as per sub-regulation (2) of SEBI guidelines.

9.4 On receiving the application for reconsideration by an applicant, the Board will re-scrutinize the application and report the conclusions in a written format to the applicant. 

10. RTA Certificate (Grant or Renew) Refusal Consequences

Candidates whose application for granting or renewing the RTA certificate gets rejected by the Board, from the date of receiving the rejection notice are not eligible to perform any RTA related activities. Valid under regulation 2 of regulation 10 of SEBI.     

11. Payment Fees for a Grant or Renewal of RTA Certificate

11.1 The candidates, applying for a grant or renewal of RTA certificate in order to operate as a certified RTA agent should submit a certain amount as the processing fee to the Board within the specified time period and in a manner as given under Schedule II of SEBI regulations.

If the candidate fails to pay the renewal fees, the Board has the right to cancel or suspend his certificate, as a result, the registrar and share transfer agent will not be able to further extend its services to its clients as an RTA service provider or provide any RTA forms to the clients.