Executive Summary:
This SEBI circular extends timelines for regulatory compliance for Depositories, Depository Participants (DPs), Registrars to an Issue/Share Transfer Agents (RTAs), and KYC Registration Agencies (KRAs) due to the ongoing COVID-19 pandemic. It further extends relaxations previously granted in circulars issued on April 16, 2020, April 24, 2020, and June 30, 2020. The period of exclusion for certain compliances is extended until September 30, 2020, with some provisions allowing a 15-day grace period after this date to clear backlogs.
Key Points / Main Content:
* **Extension of Timelines:**
* Timelines for compliance with regulatory requirements by DPs, RTAs, and KRAs are further extended.
* **Demat Request Form Processing:**
* Issuer RTAs: The period of exclusion for processing demat request forms is extended from March 23, 2020, until September 30, 2020.
* Participants: Processing of demat request forms also has a period of exclusion from March 23, 2020, till September 30, 2020
* **KYC Application Uploads:**
* Depositories/DPs: A 15-day grace period after September 30, 2020, is allowed to upload KYC application forms and supporting documents to the KRA system to clear backlogs.
* **Internal Audit Report (IAR) Submission:**
* DPs: The deadline for submitting the half-yearly IAR for the period ended March 31, 2020, is extended to September 30, 2020.
* **Investor Grievance Redressal, Transmission of Securities, Closure of Demat Account:**
* The period of exclusion for redressal of investor grievances, transmission of securities, and closure of demat accounts, is from March 23, 2020, until September 30, 2020, with a 15-day grace period after for Depository/DPs to clear backlogs.
* **Systems Audit:**
* The deadline for systems audit on an annual basis for the financial year ended on March 31, 2020, is extended to September 30, 2020.
* **Existing Conditions:**
* All other conditions specified in the previously mentioned circulars remain applicable.
* **Dissemination:**
* Depositories are directed to inform their participants about the provisions of this circular and disseminate the information on their websites.
Impact Analysis:
* **Depositories:**
* *Impact:* Responsible for informing participants and disseminating the circular on their websites.
* *Action Required:* Notify participants and update website with the new provisions.
* **Depository Participants (DPs):**
* *Impact:* Extended timelines for various compliance requirements, including demat processing, KYC uploads, IAR submission, and grievance redressal.
* *Action Required:* Adjust compliance schedules to align with the extended deadlines and clear any backlogs within the specified grace periods.
* **Registrars to an Issue/Share Transfer Agents (RTAs):**
* *Impact:* Extended timelines for processing demat requests.
* *Action Required:* Align processing schedules with the new deadlines.
* **KYC Registration Agencies (KRAs):**
* *Impact:* Affected by the extended timeline for DPs to upload KYC information.
* *Action Required:* Be prepared to receive backlog uploads from DPs within the 15-day grace period after September 30, 2020.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): Regulatory body for securities markets in India, responsible for protecting investors and promoting market development.
COVID-19 pandemic: The global pandemic that caused disruptions and led to relaxations in regulatory timelines.
Depositories: Organizations that hold securities in electronic form.
Depository Participants (DPs): Agents of depositories who provide services to investors.
Registrars to an Issue Share Transfer Agents (RTAs): Entities responsible for managing shareholder records and processing share transfers.
KYC Registration Agency (KRA): Agency responsible for maintaining and updating Know Your Customer (KYC) records of investors.
Depositories Act, 1996: An act of the Indian Parliament which provides a legal framework for the establishment and operation of depositories in India
SEBIHOMIRSDDOPCIRP202062: SEBI circular number dated April 16, 2020, providing relaxations in regulatory timelines.
CIRCULAR
SEBI/HO/MIRSD/DOP/CIR/P/2020/142 July 29, 2020
To,
1. All Depositories
2. Depository Participants through Depositories
3. Registrars to an Issue & Share Transfer Agents (RTA)
4. KYC Registration Agency
Madam / Sir,
Subject: Relaxation in timelines for compliance with regulatory requirements
1. In view of the situation arising due to COVID-19 pandemic, lockdown imposed by the
Government and representations received from the Depositories, SEBI had earlier
provided relaxations in timelines for compliance with various regulatory requirements
by the depository participants (DPs) / Registrars to an Issue & Share Transfer Agents
(RTAs), vide circular nos. SEBI/HO/MIRSD/DOP/CIR/P/2020/62 dated April 16, 2020,
and SEBI/HO/MIRSD/DOP/CIR/P/2020/72 dated April 24, 2020. Later, vide circular
no. SEBI/HO/MIRSD/DOP/CIR/P/2020/112 dated June 30, 2020, timelines / period of
exclusion was further extended for certain compliance requirements.
2. In view of the prevailing situation due to COVID-19 pandemic and representation
received from the Depositories, it has been decided to further extend the timelines for
compliance with the regulatory requirements by DPs / RTAs / KRAs, mentioned in the
SEBI circulars, as under:
Compliance requirements for which S. Nos. for Extended timeline /
timelines were extended vide SEBI which timeline Period of exclusion
circular No. is extended
SEBI/HO/MIRSD/DOP/CIR/P/2020/62
dated April 16, 2020.
Processing of the demat request form by I Period of exclusion shall
Issuer / RTA. be from March 23, 2020
till September 30, 2020.
Processing of the demat request form II
by the Participants.
III
A 15-day time period
KYC application form and supporting after September 30,
documents of the clients to be uploaded 2020 is allowed to
Depository / DPs, to
on system of KRA within 10 working
clear the back log.
days.
Page 1 of 2Compliance requirements for which S. Nos. for Extended timeline /
timelines were extended vide SEBI which timeline Period of exclusion
circular No. is extended
SEBI/HO/MIRSD/DOP/CIR/P/2020/72
dated April 24, 2020.
Submission of half yearly Internal Audit II September 30, 2020.
Report (IAR) by DPs for half year ended
March 31, 2020.
Redressal of investor grievances. III Period of exclusion shall
Transmission of securities. IV be from March 23, 2020
V till September 30, 2020.
A 15-day time period
Closure of demat account. after September 30,
2020 is allowed to
Depository / DPs, to
clear the back log.
VI September 30, 2020 for
Systems audit on annual basis.
the financial year ended
on March 31, 2020.
3. All other conditions specified in the aforementioned circulars shall continue to remain
applicable.
4. Depositories are directed to bring the provisions of this circular to the notice of their
participants and also disseminate the same on their websites.
5. This circular is issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992, and Section 19 of the Depositories
Act, 1996 to protect the interests of investors in securities and to promote the
development of, and to regulate the securities markets.
Yours faithfully
Narendra Rawat
General Manager
Market Intermediaries Regulation and Supervision Department
Page 2 of 2