Investor Charter and Grievance Redressal Mechanism for RTAs Explained

Investor Charter and Grievance Redressal Mechanism for RTAs

The Securities and Exchange Board of India (SEBI) has introduced an Investor Charter designed for Registrars to an Issue and Share Transfer Agents (RTAs). This charter outlines the services offered to investors, their rights, RTA activities with associated timelines, best practices for investors, and a grievance redressal mechanism.

Purpose of the Circular

According to Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/670, dated November 26, 2021, all registered RTAs must take necessary actions to ensure that both existing and new shareholders are informed about the Investor Charter outlined in Annexure A. The key points include:

1. Distribution of the Investor Charter:

   • Publish the Investor Charter on their websites and distribute it via email.
   • Display the Investor Charter prominently in their offices.

2. Collaboration with RAIN:

   • The Registrar Association of India (RAIN) is also required to disseminate the Investor Charter on its website.

3. Transparency in the Grievance Redressal Mechanism:

   • RTAs must post data regarding complaints received against them or the issues they handle, along with the resolution status, on their websites by the 7th day of the following month as per the format specified in Annexure B.

4. Effective Date:

   • Compliance with this circular is mandatory from January 01, 2022.

This circular is issued under the mandate of Section 11(1) of the Securities and Exchange Board of India Act, 1992, aimed at protecting investor interests and regulating the securities market.

Vision and Mission of the Investor Charter

• Vision: To be a trustworthy and transparent service provider, upholding the highest standards of compliance, confidentiality, and professionalism in serving investors in the Indian capital markets.

• Mission:

  • Ensure integrity in business conduct by fulfilling obligations promptly and ethically.
  • Comply with regulatory requirements in a timely manner.
  • Streamline processes and utilize technology to enhance prompt service to investors.
  • Facilitate efficient communication and support for resolving investor queries and grievances.

Services Offered by RTAs

RTAs provide a variety of services to investors, including:

• Allotment details and clarifications on investments.
• Updating personal KYC details for physical holdings.
• Processing requests for title changes in investor holdings.
• Handling corporate actions such as dividend payments and mergers.
• Executing transfers to the Investor Education and Protection Fund (IEPF) when necessary.

Timelines for RTA Services

Service	Expected Timelines (days)
Processing of transmission requests	21
Issuing duplicate security certificates	30
Dematerialization requests	15
Rematerialization requests	30
Various KYC updates and changes	15 to 30
Response to investor inquiries	30
Allotment of securities (IPO)	6

Rights of Investors

Investors are entitled to:

• Access all relevant company information and benefits.
• Participate in AGMs/EGMs and vote on business resolutions.
• Seek grievance redressal from RTAs, depositories, companies, stock exchanges, or SEBI.

DOs and DON’Ts for Investors

Dos:

1. Regularly collect dividends to prevent unclaimed amounts.
2. Follow up on pending allotments or certificates.
3. Ensure PAN registration for all folios.
4. Register nominations for smooth transmission.
5. Update KYC details for efficient communication.
6. Provide accurate bank details to facilitate timely credit.

Don'ts:

1. Avoid maintaining folios without a PAN.
2. Do not leave folios un-nominated.
3. Refrain from dealing with unauthorized individuals for service requests.
4. Never share sensitive information like security details with unverified parties.

Grievance Redressal Process

Steps to Follow:

1. Check RTA or company websites for grievance submission details.
2. Use designated help numbers or points of contact for queries.
3. Register grievances through dedicated email addresses or via physical letters.

When submitting a complaint, include:

• Nature of the complaint
• Company name
• Folio number and contact information
• Any relevant reference and documents

RTAs must acknowledge receipt of complaints and provide resolutions within 30 days.

Complaints to Stock Exchanges and SEBI

• Investors can lodge complaints with stock exchanges online, which will then facilitate communication with the concerned company.
• Dissatisfaction with the response can lead to lodging complaints through SEBI's SCORES system, accessible at https://scores.gov.in/.

Complaint Data Disclosure by RTAs

Registered RTAs are required to publicly display data regarding complaints on their websites following the format specified in Annexure B, which includes the status of complaints, resolution timelines, and monthly updates of complaints received.

By adhering to these guidelines, RTAs can ensure that they serve investors effectively while enhancing transparency and trust in the capital markets.