SEBI Revamps RTA Regulations: A New Era for Listed and Unlisted Company Services
SEBI proposes activity-based regulation for Registrars and Transfer Agents (RTAs), distinguishing between services for listed and unlisted companies. RTAs must create Separate Business Units for unlisted services, ensuring operational separation. The proposal includes merging RTI and STA into a unified category, fraud prevention systems, and revised net worth calculations.
- Country:
- India
The Securities and Exchange Board of India (SEBI) on Thursday announced proposed changes to regulations governing Registrars and Transfer Agents (RTAs). Under the new rules, RTAs will be required to establish a Separate Business Unit (SBU) for services provided to unlisted companies, which will be under the oversight of the Ministry of Corporate Affairs (MCA).
Highlighting the need for operational separation, the SEBI plan includes merging the two existing RTA categories, Registrar to an Issue (RTI) and Share Transfer Agent (STA), into a single category. A unified net worth requirement of Rs 50 lakh has also been suggested. The proposals aim to align with evolving market practices, especially given the phase-out of physical share transfers.
Additionally, SEBI seeks to bolster fraud prevention with internal controls within RTAs, including accountability measures at the CEO/MD level, audit committee oversight, and KYC-based monitoring. Public feedback on these proposals is being sought until August 28.
(With inputs from agencies.)
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