NISM Series II-A (RTA Corporate) cheat sheet

SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 govern registration and conduct; a person may act as RTA only after obtaining a certificate of registration from SEBI under Regulation 3.

Two categories exist: Category I RTA may act as registrar to an issue and as share transfer agent; Category II may act only as registrar to an issue (or only as share transfer agent as specified), with net worth thresholds of Rs. 50 lakh for Category I and Rs. 25 lakh for Category II.

Registration is granted for an initial period of five years and must be renewed; an application for renewal must be made not less than three months before expiry of registration.

Minimum net worth must be maintained at all times; Category I RTA must maintain net worth of not less than Rs. 50 lakh and Category II not less than Rs. 25 lakh, certified annually to SEBI.

An RTA must pay the prescribed registration fee and, where applicable, renewal fee as per the Second Schedule; failure to pay fees can lead to cancellation of registration.

Code of conduct under the Regulations requires maintenance of confidentiality, avoidance of conflict of interest, fair and timely service to issuers and investors, and maintenance of records for a minimum of five years.

SEBI may suspend or cancel registration for violations after giving an opportunity of hearing; appeal lies to the Securities Appellate Tribunal (SAT) within 45 days of the order.

An RTA must appoint a compliance officer responsible for monitoring compliance with the Act, rules, regulations and bye-laws and for redressal of investor grievances.

An RTA must enter into a written agreement with each issuer client specifying scope of services, duties, fees and responsibilities before commencing registrar or transfer agent activities.

Know Your Client (KYC) norms require verification of identity and address of clients (issuers and, where applicable, beneficial owners) and maintenance of records of such verification.

Records of transactions, correspondence, registers and documents must be preserved for a minimum period of five years and made available to SEBI on demand.

The RTA must maintain a register of documents, agreements and records, and must report to SEBI any change in its status, including change of management, address, or net worth falling below the prescribed minimum.

An RTA must not act as a registrar to an issue in which it is an associate of the issuer or has any conflict of interest; independence from the issuer is mandatory.

Investor grievances must be resolved within the timeframes prescribed by SEBI; the RTA must maintain a grievance register and report pending complaints to SEBI on a periodic basis.

On ceasing to act as RTA, the entity must surrender its registration certificate and transfer all records to the successor or to SEBI as directed.

An RTA must submit periodic reports to SEBI, including half-yearly reports on investor grievances and annual net worth certificates, in the prescribed formats.

Physical share transfers must be processed and the transferee's name registered within 30 days of receipt of a valid, complete transfer deed; if rejected, the reason must be communicated to the transferee within 30 days.

The share transfer committee/register must be maintained, and the RTA must ensure the register of members is updated and reconciled with the depository records for dematerialised holdings.

On receipt of a dematerialisation request, the RTA must confirm or reject the request within 21 days of receipt from the depository participant, in accordance with NSDL/CDSL bye-laws.

Corporate actions such as bonus, rights, splits, mergers, and dividend payments must be processed within the timeframes prescribed by SEBI and the depositories; the RTA must reconcile entitlements with the depository.

Dividend warrants/ECS credits must be dispatched within 30 days of declaration; unpaid/unclaimed dividends must be transferred to the Investor Education and Protection Fund (IEPF) after seven years.

Shares in respect of which dividend has remained unpaid/unclaimed for seven consecutive years must be transferred to the IEPF Authority, and the RTA must file Form IEPF-2 with the Authority.

The RTA must maintain an up-to-date register of members and register of debenture holders and make them available for inspection as required by the Companies Act, 2013.

For transmission of shares, the RTA must process requests within the timeframes prescribed, verifying succession documents, and must not insist on documents beyond those prescribed.

As registrar to an issue, the RTA must ensure that the basis of allotment is finalised in consultation with the lead manager/stock exchange and that allotment is made within the timeline prescribed by SEBI (generally within 2 working days of closure of the issue for book-built issues, subject to SEBI ICDR timelines).

Refund of application money must be made within the prescribed period (generally within 15 days of closure of the issue) and interest paid for delayed refunds at the rate prescribed by SEBI.

The RTA must reconcile applications, amounts collected and allotments, and must ensure that the issue is not oversubscribed beyond the disclosed limits without SEBI approval.

The RTA must maintain records of applications, allotment, refunds and demat credits for the prescribed period and make them available for inspection by SEBI and the stock exchanges.

The RTA must ensure that securities allotted are credited to the demat accounts of allottees within the prescribed timeline and that the listing approval is obtained from the stock exchanges before allotment.

For rights issues, the RTA must process applications, issue letters of offer, and manage the allotment and refund process in accordance with the Companies Act, 2013 and SEBI ICDR Regulations.

The RTA must not deploy issue proceeds; funds must be kept in a designated escrow/issue account and released only as per the issuer's instructions and the offer document.

The RTA must report any material deviation or non-compliance in the issue process to SEBI and the lead manager immediately.