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NISM Series II-A (RTA Corporate) study materials
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NISM Series II-A (RTA Corporate) practice questions

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Question 1Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Under the SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, an entity seeking registration as a registrar to an issue must apply to SEBI in which prescribed form?

  1. Form C
  2. Form A Correct answer.
  3. Form TA
  4. Form D

Explanation

The RTA Regulations prescribe Form A as the application form for grant of a certificate of registration as a registrar to an issue or share transfer agent. Form D relates to the certificate of registration issued by SEBI, and Form TA belongs to the debenture trustee regulations. Applicants must route the application through the prescribed form together with the requisite fee and supporting documents.

Question 2Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which activity falls within the scope of a share transfer agent's functions for a listed company?

  1. Carrying out the statutory audit of the company's books of account
  2. Determining the price band for the company's initial public offer
  3. Underwriting the company's rights issue and bearing the unsold portion
  4. Maintaining the register of members and processing transfers and transmissions of securities Correct answer.

Explanation

A share transfer agent handles the company's registry work: maintaining the register of members, processing transfers, transmissions, transpositions, and issuing duplicate certificates. Underwriting, statutory audit, and price discovery are distinct functions performed by other intermediaries or the company itself. The RTA acts as an agent of the issuer for registry-related activities only.

Question 3Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An applicant for a certificate of registration as an RTA must satisfy which capital adequacy requirement?

  1. A bank guarantee equal to the annual fee payable to SEBI
  2. Paid-up equity capital of at least the amount specified, with no net worth test
  3. Deposit of the entire net worth in a government securities account
  4. Net worth of at least the amount specified in the regulations, maintained on a continuous basis Correct answer.

Explanation

The regulations require an applicant to maintain a minimum net worth, computed as paid-up capital plus free reserves less accumulated losses and intangible assets. The requirement is a continuing one, so the RTA must keep SEBI informed if net worth falls below the prescribed threshold. A bank guarantee or a government securities deposit is not the regulatory test.

Question 4Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA receives a valid instrument of transfer of listed equity shares. Within what time must the transfer be effected and the securities returned to the transferee?

  1. Within fifteen days of receipt of the complete documents Correct answer.
  2. Within one month of receipt of the complete documents
  3. Within forty-five days of receipt of the complete documents
  4. Within ninety days of receipt of the complete documents

Explanation

SEBI requires that valid transfers be registered and the securities returned within fifteen days of receipt of complete documents, failing which the RTA must pay interest to the transferee. The one-month limit applies to other registry matters such as issue of duplicate certificates. The forty-five and ninety day figures do not correspond to the transfer timeline.

Question 5Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Where an RTA fails to complete registration of a transfer within the prescribed time, what consequence follows under the SEBI RTA framework?

  1. The transfer automatically becomes void and the shares revert to the transferor
  2. The transferee forfeits the right to receive the shares
  3. The RTA must pay interest to the transferee at the prescribed rate for the delay period Correct answer.
  4. SEBI cancels the issuer's listing approval

Explanation

The regulations impose a monetary consequence on the RTA for delay: interest at the prescribed rate is payable to the transferee for the period of delay. The transfer itself is not invalidated, and the issuer's listing is unaffected. This mechanism protects investors from administrative delay by the intermediary.

Question 6Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

A shareholder lodges a complaint alleging that share certificates were issued without proper authority. Which responsibility does the RTA bear in the grievance redressal process?

  1. Refer the complaint to the statutory auditor of the issuer for final disposal
  2. Advise the shareholder to file a civil suit as the only remedy
  3. Forward the complaint to the stock exchange and close its file
  4. Resolve the complaint within the prescribed timeline and report the status to SEBI as required Correct answer.

Explanation

RTAs must maintain a grievance redressal mechanism, resolve investor complaints within the prescribed timelines, and report compliance to SEBI through the prescribed system. Forwarding without action, referring to the auditor, or pushing the investor to litigation does not discharge this obligation. Unresolved complaints escalate to SEBI's online complaint platform.

Question 7Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which record must an RTA maintain regarding the securities received for transfer?

  1. A list of transferees maintained by the issuer's company secretary
  2. A register of transfer deeds with details of date of receipt, date of processing, and folio particulars Correct answer.
  3. A verbal log maintained by the dealing officer
  4. Only a consolidated annual summary filed with the stock exchange

Explanation

The RTA must maintain proper records of every transfer deed received, including the date of receipt, date of processing, and folio details, so that timelines can be verified. Records must be preserved for the period prescribed under the regulations and produced on demand. An annual summary or a verbal log does not satisfy this requirement.

Question 8Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

How often must an RTA undergo a compliance audit by an independent qualified auditor?

  1. Once every financial year, covering the operations of the preceding year Correct answer.
  2. Only when SEBI issues a specific direction
  3. Once every three financial years
  4. Only when the issuer requests an audit

Explanation

The RTA Regulations require an annual compliance audit by an independent qualified auditor, with the report submitted to SEBI within the prescribed time. The audit covers compliance with the regulations and the operational norms for registry work. It is a recurring annual obligation, not an event-driven one.

Question 9Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA holds a certificate of registration and wishes to open a branch office. What is the correct course of action?

  1. Intimate SEBI and comply with the prescribed conditions before commencing branch operations Correct answer.
  2. Seek prior approval from the stock exchange where the issuer is listed
  3. Obtain a fresh certificate of registration for each branch
  4. Open the branch and report it only in the next annual audit

Explanation

Opening a branch requires intimation to SEBI and compliance with the prescribed conditions; a separate certificate for each branch is not contemplated. The stock exchange's approval is not the regulatory gateway for an RTA's branch. Reporting only at the next audit would breach the intimation requirement.

Question 10Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which of the following is a code of conduct obligation for an RTA?

  1. Refraining from divulging confidential information about clients to third parties without consent Correct answer.
  2. Purchasing securities of client companies for its own account
  3. Sharing client folio data with marketing agencies for a fee
  4. Guaranteeing a minimum return on the securities held in demat accounts

Explanation

The code of conduct requires RTAs to maintain confidentiality of client information and to act in the client's interest. RTAs cannot deal in securities of their client companies on their own account, and they cannot sell client data. Guaranteeing returns is outside the scope of registry services.

Question 11Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA receives a request for transmission of shares following the death of a sole holder. Which document set is typically required?

  1. Only the original share certificate with the holder's signature
  2. A no-objection certificate from the stock exchange
  3. Death certificate and succession or legal heirship documents as prescribed Correct answer.
  4. A fresh transfer deed executed by the deceased holder

Explanation

Transmission does not involve a transfer deed; the RTA requires proof of death and evidence of the claimant's entitlement, such as a succession certificate or legal heirship certificate, along with the prescribed forms. A transfer deed signed by the deceased is impossible and irrelevant. Stock exchange clearance is not part of transmission processing.

Question 12Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

What is the significance of the distinctive numbers recorded in the register of members?

  1. They represent the market price at which the shares were allotted
  2. They record the dividend entitlement for the year
  3. They indicate the voting weight of each shareholder
  4. They identify the specific share certificates and range of shares allotted to a holder Correct answer.

Explanation

Distinctive numbers are serial identifiers that trace each share to its certificate and holder, enabling reconciliation of the register with the certificates issued. They do not relate to price, voting weight, or dividend entitlement. Accurate recording of distinctive numbers is essential to detect duplicate or fraudulent certificates.

Question 13Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Before registering a transfer of shares, what must the RTA verify about the instrument of transfer?

  1. That it is countersigned by the statutory auditor
  2. That it is accompanied by a banker's certificate of the transferee's net worth
  3. That it is duly stamped, dated, and executed by both transferor and transferee with witness particulars Correct answer.
  4. That it is typed on the issuer's letterhead

Explanation

The instrument of transfer must be validly stamped, properly dated, and executed by both parties in the presence of witnesses, with the share certificate and other prescribed documents attached. Letterhead, banker's certificates, and auditor countersignature are not requirements. Deficiencies in execution are grounds for returning the transfer documents.

Question 14Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA is appointed by a listed company. Which of the following best describes the legal relationship?

  1. The RTA is an employee of the issuer for all purposes
  2. The RTA is a statutory body created under the Companies Act
  3. The RTA acts as an agent of the issuer for registry functions and is separately accountable to SEBI Correct answer.
  4. The RTA acts as trustee for the company's debenture holders

Explanation

The RTA is an independent SEBI-registered intermediary engaged by the issuer to perform registry functions as its agent. It is not an employee of the issuer, nor a statutory body, and its role differs from that of a debenture trustee. Dual accountability to the issuer and to SEBI is a defining feature of the relationship.

Question 15Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

A company changes its RTA midway through the year. What is the correct approach to the records held by the outgoing RTA?

  1. The outgoing RTA may retain the records until the annual audit is completed
  2. The outgoing RTA must transfer all records and data to the incoming RTA and report the change as prescribed Correct answer.
  3. The records remain with the outgoing RTA permanently and are accessed on request
  4. The records must be destroyed and recreated by the incoming RTA

Explanation

On a change of RTA, complete records, data, and pending investor complaints must be handed over to the incoming RTA, and the change is notified as required. Retention by the outgoing RTA or destruction of records would disrupt investor servicing. Permanent retention by the former agent is inconsistent with a smooth transition.

Question 16Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which statement correctly describes the obligation of an RTA regarding the reconciliation of share capital?

  1. It must reconcile the total admitted capital with the securities held in dematerialised and physical form and report differences Correct answer.
  2. It must reconcile capital only at the time of the annual general meeting
  3. It must reconcile capital only when SEBI directs a special audit
  4. It must reconcile capital only for the issuer's preferential allotments

Explanation

Reconciliation of admitted, listed, and issued capital against demat and physical holdings is a core RTA control to detect excess or duplicate issuance. It is a continuing obligation, not one confined to the AGM, a SEBI direction, or preferential allotments. Discrepancies must be reported through the prescribed channels.

Question 17Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which of the following best describes the RTA's duty when it receives a request for issue of duplicate share certificates?

  1. Refer the request to the stock exchange for approval before processing
  2. Issue the duplicate certificate immediately on oral request by the holder
  3. Reject all requests where the original certificate is untraceable
  4. Verify the loss, obtain the prescribed indemnity and affidavit, and process within the prescribed timeline after the required notice Correct answer.

Explanation

Duplicate certificates are issued after verification of loss, receipt of an affidavit and indemnity bond, and compliance with the notice or advertisement requirement, within the prescribed timeline. Oral requests, exchange approval, or blanket rejection are not correct procedures. The process protects the issuer against double claims on the same shares.

Question 18Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

What does 'record date' mean in the context of an RTA's operations?

  1. The date on which the share certificate is printed
  2. The date fixed by the issuer for determining the holders entitled to a corporate benefit Correct answer.
  3. The date on which the RTA's registration certificate expires
  4. The date of the annual compliance audit

Explanation

The record date is fixed by the issuer to determine which holders are entitled to dividends, rights, bonus, or other benefits. The RTA uses the register and depository data as on that date to prepare the entitlement list. It has no connection to certificate printing, registration expiry, or audit dates.

Question 19Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA notices that the issuer's demat holding and physical holding together exceed the issued capital. What is the most appropriate first action?

  1. Immediately cancel the excess shares in the demat accounts
  2. Adjust the register to match the demat position without inquiry
  3. Ignore the difference as it is a depository matter
  4. Investigate and reconcile the discrepancy and report it through the prescribed regulatory channel Correct answer.

Explanation

A mismatch between issued capital and aggregate holdings may indicate duplicate or fraudulent issuance, so the RTA must investigate, reconcile, and report it as prescribed. Unilateral adjustment or cancellation without inquiry would conceal the problem. Treating it purely as a depository matter ignores the RTA's reconciliation duty.

Question 20Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which fee structure applies to an application for registration as an RTA under the regulations?

  1. A fee payable only after the first compliance audit
  2. No fee, as RTAs are registered free of charge
  3. A one-time fee payable only at the time of renewal
  4. A non-refundable application fee and an annual registration fee as prescribed Correct answer.

Explanation

An applicant pays a non-refundable application fee along with the application, and a registered RTA pays the prescribed annual fee to keep the registration in force. There is no free registration, and the fee is not deferred to renewal or audit. Fee amounts are specified in the regulations and schedules.

Question 21Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Under the code of conduct, how should an RTA handle a situation where its own interest conflicts with that of a client?

  1. Refer the matter to the transferee for a decision
  2. Delegate the decision to the issuer's board without disclosure
  3. Disclose the conflict and act in the client's interest, avoiding transactions that benefit the RTA at the client's expense Correct answer.
  4. Proceed with the transaction if it is profitable to the RTA

Explanation

The code of conduct requires RTAs to avoid conflicts of interest and, where a conflict arises, to disclose it and act in the client's interest. Profiting at the client's expense, concealing the conflict, or shifting the decision to another party breaches this duty. Fiduciary-style standards apply to registry intermediaries.

Question 22Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which of the following powers does SEBI have in relation to a registered RTA?

  1. To fix the remuneration payable by the issuer to the RTA
  2. To direct the RTA to underwrite the issuer's public issue
  3. To inspect books and records and to suspend or cancel registration for violations Correct answer.
  4. To appoint the RTA's statutory auditor

Explanation

SEBI supervises RTAs through inspection, inquiry, and enforcement, including suspension or cancellation of registration. It does not appoint the RTA's auditor, fix commercial remuneration, or require an RTA to underwrite issues. Enforcement powers are exercised after giving the intermediary an opportunity to be heard.

Question 23Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA is processing a transmission request where the nominee and the legal heir both claim the shares. What is the correct approach?

  1. Register the transmission in favour of whichever claimant applies first
  2. Follow the prescribed documentary and legal process, obtaining clarification of entitlement before registering the transmission Correct answer.
  3. Reject both claims and advise the parties to approach a civil court
  4. Transfer the shares to the issuer pending resolution

Explanation

Competing claims require the RTA to follow the prescribed documentary and legal process to establish entitlement before registering transmission. First-come processing, outright rejection, or parking shares with the issuer would not be correct handling. The RTA must act on valid legal evidence of succession or nomination.

Question 24Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

What is the role of the RTA in a rights issue?

  1. Determining the issue price and the entitlement ratio
  2. Providing the credit rating for the issue
  3. Processing allotment, despatching letters of offer, and handling the post-issue registry work as mandated Correct answer.
  4. Underwriting the unsubscribed portion of the issue

Explanation

In a rights issue, the RTA handles the registry aspects: despatch of letters of offer, processing applications and allotment, and post-issue records. Price and ratio are decided by the issuer with its merchant banker, while underwriting and credit rating are separate specialised functions. The RTA's role is administrative and record-based.

Question 25Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which obligation applies to an RTA with respect to investor complaints received through SEBI's SCORES platform?

  1. Wait for the investor to resubmit the complaint in writing
  2. Action the complaint within the prescribed timeline and submit an action-taken report Correct answer.
  3. Forward the complaint to the issuer and close it on SCORES
  4. Acknowledge the complaint but take no further action

Explanation

Complaints received on SCORES must be resolved within the prescribed timeline, and an action-taken report must be filed on the platform. Mere acknowledgement, forwarding with closure, or requiring resubmission does not meet the obligation. Non-compliance affects the intermediary's complaint redressal record with SEBI.

Question 26Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Under the SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, an applicant seeking a certificate of registration as a category I RTA must meet which minimum net worth requirement?

  1. Net worth of at least INR 10 lakh
  2. Net worth of at least INR 50 lakh Correct answer.
  3. Net worth of at least INR 1 crore
  4. Net worth of at least INR 5 crore

Explanation

The regulations prescribe a minimum net worth of INR 50 lakh for category I RTAs. Net worth must be maintained on a continuous basis and is computed as paid-up capital plus free reserves less intangible assets and accumulated losses.

Question 27Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA registered with SEBI appoints a compliance officer. What is the primary function of this officer under the RTA regulations?

  1. To independently audit the RTA's annual financial statements
  2. To monitor compliance with securities laws and report to SEBI Correct answer.
  3. To negotiate fees with issuer companies on behalf of the RTA
  4. To maintain the register of members on a day-to-day basis

Explanation

The compliance officer is responsible for monitoring compliance with the Act, rules, regulations and guidelines, and for reporting violations to SEBI. This role is distinct from financial auditing and from operational record-keeping.

Question 28Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which document is the primary instrument that an RTA must verify when processing a transfer of physical shares?

  1. The board resolution of the transferee company
  2. The share certificate together with a valid instrument of transfer Correct answer.
  3. The PAN card of the transferor only
  4. The annual report of the issuer company

Explanation

A transfer of physical shares requires a valid instrument of transfer, duly executed and stamped, accompanied by the relevant share certificate. The RTA must verify execution, stamping and signature matching before registering the transfer.

Question 29Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA receives a request to register a transfer of shares where the instrument of transfer is undated. What is the correct course of action?

  1. Register the transfer as the signatures are valid
  2. Return the instrument for dating before processing Correct answer.
  3. Forward it to SEBI for clarification
  4. Accept it if the share certificate is enclosed

Explanation

The date of execution is a mandatory particular on the instrument of transfer. An undated instrument is incomplete and must be returned to the presenter for rectification before the RTA can process the transfer.

Question 30Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Within how many days from the date of lodgement must an RTA complete the registration of a transfer of shares in the case of a listed company?

  1. 30 days Correct answer.
  2. 15 days
  3. 7 days
  4. 45 days

Explanation

For listed companies, the transfer must be registered within 30 days from the date of lodgement, failing which the company must intimate the transferee and the transferor. This timeline is prescribed under the listing obligations and the RTA regulations.

Question 31Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA receives a valid transmission request after the death of a joint holder. What is the correct approach for registering the transmission?

  1. Freeze the shares until a court order is obtained
  2. Register the transmission in favour of the surviving joint holder(s) Correct answer.
  3. Transfer the shares to the nominee named in the will
  4. Require probate before any transmission can be recorded

Explanation

On the death of one of several joint holders, the shares devolve upon the surviving joint holder(s) by operation of the survivorship principle. The RTA registers the transmission in favour of the survivor(s) upon receipt of a death certificate and the prescribed request form.

Question 32Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA is required to maintain records of securities received for transfer. How long must these records generally be preserved?

  1. For 8 years from the date of receipt Correct answer.
  2. For 10 years from the date of receipt
  3. For 5 years from the date of receipt
  4. For 3 years from the date of receipt

Explanation

The RTA regulations require preservation of records relating to securities received for transfer for a minimum period of 8 years. This enables reconstruction of the audit trail and supports regulatory inspections.

Question 33Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which register must an RTA maintain to record the particulars of every share certificate issued, cancelled or replaced?

  1. The register of charges
  2. The register of share certificates Correct answer.
  3. The register of contracts
  4. The register of directors and key managerial personnel

Explanation

The RTA maintains a register of share certificates that records the certificate number, distinctive numbers, number of shares, and details of issue, cancellation or replacement. This register supports reconciliation of physical share capital.

Question 34Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA receives a request to issue a duplicate share certificate in respect of lost certificates. Which condition must be satisfied before the duplicate is issued?

  1. The holder must surrender the original certificates
  2. The holder must obtain a court decree in every case
  3. The holder must furnish an indemnity bond and the loss must be advertised Correct answer.
  4. The holder must pay a penalty to SEBI

Explanation

For issue of duplicate certificates against lost originals, the RTA requires an indemnity bond with or without surety, and publication of a notice of loss in a newspaper as prescribed. These safeguards protect the issuer against future claims on the original certificates.

Question 35Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

What is the role of the RTA in relation to the reconciliation of share capital of a listed company?

  1. To approve the company's dividend policy
  2. To certify the company's annual financial statements
  3. To determine the market price of the shares
  4. To reconcile physical and demat holdings with issued capital and report discrepancies Correct answer.

Explanation

The RTA reconciles the total issued capital with the aggregate of physical certificates and demat holdings, and reports any discrepancy to the issuer and to SEBI. This reconciliation is a key control against over-issuance and record mismatches.

Question 36Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA is required to submit a report to SEBI in respect of investor complaints. What does this reporting obligation primarily cover?

  1. The complaints filed against the issuer's statutory auditor
  2. The RTA's own internal staff grievances
  3. The complaints relating to the RTA's office premises
  4. The number of complaints received and redressed during the period Correct answer.

Explanation

The RTA must report the number of investor complaints received, redressed and pending, along with the time taken for redressal. This reporting supports SEBI's oversight of investor grievance handling by RTAs.

Question 37Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA is processing a dematerialisation request. Which action is within the RTA's responsibility?

  1. Acting as a depository participant
  2. Confirming the request and updating the register of members Correct answer.
  3. Opening the demat account for the investor
  4. Providing margin trading facilities

Explanation

In dematerialisation, the RTA confirms the request received from the depository and updates the register of members to reflect the reduced physical holding. The demat account itself is opened and maintained by a depository participant.

Question 38Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which statement best describes the RTA's obligation regarding the register of members when a company has both physical and demat shares?

  1. The register must be updated annually only
  2. The register must be maintained only by the depository
  3. The register must reflect both physical and demat holdings accurately Correct answer.
  4. The register must record only physical holdings

Explanation

The register of members must reflect the total holding of each member, whether held in physical form or dematerialised form. The RTA updates the register on the basis of transfer, transmission and demat confirmations.

Question 39Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA is required to obtain a certificate of registration from SEBI. Which condition must be satisfied on a continuous basis after registration?

  1. Opening of a branch in every state
  2. Appointment of a whole-time director
  3. Maintenance of the prescribed net worth Correct answer.
  4. Submission of monthly audited financial statements

Explanation

A registered RTA must maintain the prescribed net worth on a continuous basis. Failure to do so can attract regulatory action, including suspension or cancellation of registration.

Question 40Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA receives an application for registration of transfer after the prescribed period from the date of lodgement. What is the correct action?

  1. Register the transfer and intimate the delay to the transferee and transferor Correct answer.
  2. Charge a penalty to the transferee before registering
  3. Reject the transfer outright
  4. Refer the matter to the stock exchange for approval

Explanation

If a transfer is not completed within the prescribed period, the RTA must still register the transfer where valid, and intimate the reasons for delay to the transferee and transferor. Outright rejection is not the prescribed consequence of delay.

Question 41Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which of the following is a code of conduct obligation for an RTA in relation to client funds and securities?

  1. To invest client funds in the RTA's own business
  2. To pool client securities with the RTA's own holdings
  3. To lend client securities to third parties
  4. To maintain client funds in a separate bank account Correct answer.

Explanation

The code of conduct requires an RTA to keep client funds in a separate bank account and not to commingle them with its own funds. Client securities must likewise be segregated and not used for the RTA's own purposes.

Question 42Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA is handling a rights issue for an issuer. What is the RTA's primary responsibility in this process?

  1. To fix the issue price of the rights shares
  2. To process applications, allot shares and dispatch allotment letters Correct answer.
  3. To provide merchant banking advice on the issue
  4. To underwrite the entire rights issue

Explanation

In a rights issue, the RTA processes the applications received, assists in allotment and dispatches allotment letters and refunds. Pricing and underwriting are decided by the issuer with its merchant banker, not by the RTA.

Question 43Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which record must an RTA maintain in respect of the stop transfer instructions received from a court or statutory authority?

  1. A register of the RTA's own investments
  2. A register of stop transfer orders with particulars of the order Correct answer.
  3. A register of employees' attendance
  4. A register of office supplies

Explanation

The RTA must maintain a record of stop transfer orders, including the authority issuing the order, the case reference and the date. This record ensures that transfers are not registered contrary to a valid legal restraint.

Question 44Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA notices that the total of physical and demat holdings exceeds the issued capital of the issuer. What is the most appropriate immediate action?

  1. Reduce the demat holdings without informing anyone
  2. Report the discrepancy to the issuer and SEBI and investigate the cause Correct answer.
  3. Issue additional shares to balance the records
  4. Ignore the discrepancy as a rounding error

Explanation

A discrepancy between aggregate holdings and issued capital indicates a serious records or issuance problem. The RTA must report it to the issuer and SEBI and investigate the cause, rather than conceal or unilaterally adjust the records.

Question 45Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA is asked by the issuer to register a transfer that would breach the prescribed limit on holdings by a single shareholder. What should the RTA do?

  1. Refuse to register the transfer and record the reasons Correct answer.
  2. Seek the transferee's consent and then register
  3. Register the transfer as instructed by the issuer
  4. Register the transfer and report the breach later

Explanation

An RTA must not register a transfer that would violate a statutory or regulatory limit on shareholding. It should refuse registration and record the reasons for refusal so that the decision can be reviewed.

Question 46Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which of the following best describes the RTA's duty when it receives a request for issue of duplicate share certificates in respect of certificates that are not lost but damaged?

  1. The damaged certificates may be retained by the holder
  2. The damaged certificates must be surrendered before duplicates are issued Correct answer.
  3. A newspaper advertisement is mandatory in every case
  4. The request must be rejected outright

Explanation

Where the original certificates are damaged but available, they must be surrendered to the RTA before duplicate certificates are issued. The advertisement and indemnity requirements are primarily associated with lost certificates.

Question 47Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA is required to maintain an audit trail of its operations. Which practice best satisfies this requirement?

  1. Recording every transfer, transmission and demat confirmation with date and time Correct answer.
  2. Recording transactions orally during staff meetings
  3. Recording only the annual summary of transactions
  4. Recording only transactions above a monetary threshold

Explanation

An effective audit trail requires contemporaneous recording of each significant transaction with date and time, enabling reconstruction of events. Summary-only or threshold-based recording does not provide a complete trail.

Question 48Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA receives a request from a shareholder to register a transfer of shares that are subject to a lien in favour of the issuer. What is the correct action?

  1. Refuse registration until the lien is discharged Correct answer.
  2. Register the transfer and transfer the lien to the transferee
  3. Register the transfer ignoring the lien
  4. Refer the matter to the transferee's bank

Explanation

A lien in favour of the issuer restricts the transferability of the shares until the lien is discharged. The RTA must refuse registration while the lien subsists, unless the issuer confirms discharge.

Question 49Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

Which of the following is a prescribed record that an RTA must maintain in relation to the transfer of securities?

  1. A register of the RTA's office leases
  2. A register of the RTA's own shareholding
  3. A register of transfer deeds received Correct answer.
  4. A register of the issuer's employees

Explanation

The RTA must maintain a register of transfer deeds received, recording the date of receipt, the transferor and transferee, and the number of shares. This register supports the audit trail for transfer processing.

Question 50Registrars to an Issue and Share Transfer Agents – Corporate (domain structure not enumerated in source)

An RTA is required to submit a compliance certificate to SEBI. Which statement correctly describes this obligation?

  1. The certificate is required only at the time of initial registration
  2. The certificate must be published in a newspaper
  3. The certificate must be signed by the issuer's managing director
  4. The certificate must be signed by the compliance officer and submitted periodically Correct answer.

Explanation

The RTA must submit a periodic compliance certificate signed by its compliance officer, confirming compliance with the regulations. This is an ongoing obligation, not a one-time requirement at registration.