**Summary:**
This circular, issued by the Securities and Exchange Board of India (SEBI) on March 10, 2023, clarifies the definition and requirements for Qualified Registrars to an Issue and Share Transfer Agents (QRTAs). It supplements SEBI Circular SEBI/HO/MIRSD/CIR/PB/2017/0000000100 dated September 08, 2017, which established the Cyber Security and Cyber Resilience Framework for RTAs.
The circular clarifies that an RTA will be categorized as a QRTA if, at any point during a financial year, the combined number of physical and demat folios serviced for listed companies exceeds 2 crore. RTAs meeting this criterion must inform SEBI within 5 working days of being categorized as a QRTA.
Once categorized as a QRTA, an RTA will maintain this status for the subsequent three financial years, regardless of any subsequent decrease in the number of folios. During this period, the QRTA must comply with all enhanced requirements specified by SEBI.
A newly categorized QRTA will be granted a 60-day period from the date of categorization to implement the necessary systems and procedures to comply with the enhanced requirements.
This circular, effective immediately, is issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992.
For further information, contact Aradhana Verma, General Manager, at Tel. No. 022-2644 9633 or via email at aradhanad@sebi.gov.in. The circular is available on the SEBI website (www.sebi.gov.in) under the "Legal Framework - Circulars" section.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): Regulatory body for the securities market in India.
Registrars to an Issue and Share Transfer Agents (RTAs): Entities registered with SEBI responsible for issue and share transfer activities.
Qualified RTAs (QRTAs): RTAs servicing more than 2 crore folios, subject to enhanced responsibilities.
SEBI Circular SEBIHOMIRSDCIRP20170000000100: SEBI circular dated September 08, 2017, concerning Cyber Security and Cyber Resilience Framework for RTAs.
Securities and Exchange Board of India Act, 1992: The act that empowers SEBI to protect investors and regulate the securities market.
March 10, 2023: Date of the circular.
Financial Year: A period of twelve months, typically used for accounting purposes.
Aradhana Verma: General Manager at SEBI and author of the circular.
CIRCULAR
SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/36 March 10, 2023
To
All registered Registrars to an Issue and Share Transfer Agents (RTAs)
Dear Sir / Madam,
Clarification with respect to Qualified RTAs (QRTAs)
1. Vide SEBI Circular SEBI/HO/MIRSD/CIR/P/2017/0000000100 dated September 08,
2017 (issued with respect to Cyber Security and Cyber Resilience Framework for
RTAs), QRTAs have been defined as RTAs servicing more than 2 crore folios.
QRTAs are required to comply with enhanced responsibilities through adoption and
implementation of an internal policy framework and periodic reporting requirements
as specified in various SEBI circulars issued from time to time.
2. In this regard, following is clarified:
a. Categorization of an RTA as QRTA
An RTA shall be categorized as a QRTA if at any time during a financial year,
the combined number of physical and demat folios being serviced by the RTA
for listed companies exceeds 2 crore.
In case of an RTA being categorized as a QRTA, an intimation to this effect
shall be sent by the RTA within 5 working days to SEBI.
b. Period for which an RTA shall be recognized as QRTA
An RTA shall be considered as a QRTA from the date of categorisation as a
QRTA as per para 2(a) above and shall be considered as such for the next 3
financial years, irrespective of subsequent fall in number of folios and shall
be liable to comply with all requirements specified from time to time.
Page 1 of 2c. Initial relaxation
Considering the various systems and procedures to be put in place by a new
QRTA, a period of 60 days from the date of its categorisation as a QRTA as
per para 2(a) above shall be provided to the new QRTA for complying with
the enhanced requirements mandated for QRTAs.
3. This circular shall come into effect immediately.
4. This circular is issued in exercise of powers conferred by Section 11(1) of the
Securities and Exchange Board of India Act, 1992 to protect the interests of investors
in securities and to promote the development of, and to regulate the securities
market.
5. This circular is available on SEBI website at www.sebi.gov.in under the categories
“Legal Framework -> Circulars”.
Yours faithfully,
Aradhana Verma
General Manager
Tel. No. 022-2644 9633
Email id - aradhanad@sebi.gov.in
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