Share Transfer Agent as per SEBI Regulation

The SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regulate the registration and operation of Share Transfer Agents in India. A Share Transfer Agent is an institution that registers and maintains the translation record of securities on behalf of the issuer.

Share Transfer Agents must satisfy the capital adequacy criteria for registration in accordance with Regulation 7 of the SEBI (Registrars to an Issue and Share Transfer Agent) Regulations.

In this article we will discuss about Share Transfer Agent meaning, role and other insights about the Share Transfer Agent.

Meaning of Share Transfer Agent

The intermediaries registered with SEBI are known as R&TAs, or registrar and transfer agents. A mutual fund company and investors are connected through registrars and transfer agents. Share Transfer Agents are employed by mutual fund companies because of their proficiency in processing data pertaining to investor transactions and changes in personal information. The SEBI has recognized 79 RTAs.

Role of Share Transfer Agent

The various roles of Share Transfer Agent are:

• The registrar or transfer agents contribute to cost reductions, especially the time spent maintaining records of investor transactions because they have experience maintaining this information for business purposes.
• It puts all the information about new offerings and their maturation dates in one location for investors.
• Anybody corporate’s transfer agent deals with issues relating to the transfer and redemption of securities issued by that body corporate.
• Replace the previous shareholder’s name and certificate on the certificate with the name of the new shareholder.
• Share fresh fund offers with investors.
• Securities are transferred, consolidated, and divided by Share Transfer Agent.
• Transfer of securities and investor record-keeping.

Specific Requirement for Share Transfer Agent

According to Regulation 7 of the SEBI (LODR) Regulations, specific requirements for share transfer agents must be adhered to:

• The listed firm must employ a share transfer agent or handle the facility internally if it has fewer than or equal to one lakh shareholders.
• Whenever a listed company has more than 100,000 subscribers: Entity must either designate a Registrar to an issue or Transfer agent registered with the Board or register with the Board as a category II share transfer agency.
• A compliance certificate properly signed by the listed entity’s compliance officer and, if appropriate, the authorized representative of the share transfer agent must be submitted to the exchange by the listed entity within 30 days of the end of the fiscal year.
• A registrar to an issuer and share transfer agent registered with the Board is required to handle all internal operations pertaining to the share transfer facility.
• In the event of a change or appointment of a new share transfer agent, the listed entity is required to enter into a tripartite agreement with the current share transfer agent, the new share transfer agent, and the listed entity. If the current share transfer facility is run internally, the listed entity and the new share transfer agent must enter into the agreement.
• The listed entity must notify the stock exchange(s) of such appointment within seven days of the agreement’s signing.
• The agreement will also be discussed at the following board of directors meeting. The requirements of this law do not apply to units issued by mutual funds that are listed on a recognized stock market.

Board consideration prior to authorizing the Registration Certificate

Before approving the registration certificate, the board considers the case, paying particular attention to the points listed below. 

• The applicant has access to necessary infrastructure, including office space, equipment, and in particular the labour force needed to carry out the activity.
• If they have any prior experience with the operations in question. 
• Any person to whom the board has denied registration who is directly or indirectly connected to the application.
• The minimum capital adequacy requirement for category 1 is a net worth of Rs. 50 lacs, whereas the need for category 2 is Rs. 25 lacs. 
• The applicant will procure a fit and appropriate person in accordance with schedule 11 of the regulation requirements.

Procedure to register as Share Transfer Agent

Share Transfer Agent should follow the following procedure to get registered with SEBI:

• The non-refundable fees of INR 6 lacs for category 1 and INR 2 lacs for category 2 must be included in the application to the board in Form A if the applicant wishes to be registered as a registrar to an issuer or share transfer agent. 
• The applicant may be asked to provide these facts after the board receives the application and may possibly be asked to attend in person.
• The application would not have been completed when the board reached the close, and the same does not affirm the requirements under the given forms, thus there may be a risk that the board might reject the application. Prior to rejection, there will be an opportunity to fix the errors at a specific time. 
• Before approving the registration certificate, the board considers the situation and the various aspects as mentioned in above header.
• Once the board has determined that the applicant is qualified for registration in the specified category and has authorized the registration certificate in Form B with the fee payments will be sent to the applicant.

Takeaway

Younger investors are more interested in investing in mutual funds, and it is important for investors to be aware of their local registrars and transfer agents because they can be excellent sources of financial knowledge. Share Transfer Agent offer support for filling out paperwork, making investments, and updating personal data. Share Transfer Agent will also notify you of plans or funds that fit your objectives and financial situation.