Now You Could Soon Send Service Requests And Complaints Regarding Your Investments Online

June 12, 2023 Mutual Fund

The market regulator, Securities and Exchange Board of India (SEBI), in its latest circular dated June 08, 2023 on Thursday, announced about the soon to be launched user-friendly online mechanism or portal for service requests and complaints regarding your online investments; it shall help investors at large.

SEBI has decided to implement a new system that provides a mechanism for processing of investors’ service requests and complaints through online mode by Registrar and Transfer Agents (RTAs) and thereafter track the status as well as obtain periodical updates.

Earlier, in March 2023, SEBI came out with a circular outlining a streamlined procedure for registrar and share transfer agents (RTAs) to follow when processing investors’ service requests. This resulted from investor complaints to SEBI about challenges they had with certain procedural components of the regulations and conflicting interpretations of the paperwork needed to complete investor service requests.

The regulator has made it mandatory for all holders of physical securities in listed companies to furnish PAN, nomination, contact details, bank account details and specimen signatures for their corresponding folio numbers. You see, at the moment, holders of physical security certificates are required to submit several documents to the registrars with respect to various service requests/ complaints including but not limited to:

• Intimation of/Updation of/change in Permanent Account Number, Nominee, Bank details, Contact details, Signature, Name etc

• Processing of investor requests (Duplicate security certificates, folio consolidation, transmission, transposition etc

• Services through depository participants such as dematerialisation, re-materialisation etc

As a result, to ease this process of investor’s service requests and complaints, SEBI endeavours to digitise the process in two phases. This will provide a mechanism for the investor to lodge service requests and complaints online without any hassle, which would, inter-alia, confer the following benefits:

• Database for service requests and complaints

• Online acknowledgement and intimation to the investor ensure transparency

• Online tracking of the status of service requests and complaints by investors

This streamlined system reduces manual paperwork and enables quick resolution of investor queries. Now let us see what SEBI has planned under these two phases of the online portal:

Phase I

All RTAs servicing listed companies are expected to have a functional website. This website will provide basic details of RTAs, names and contact details of key managerial personnel, including compliance officers and step-by-step procedures for various service requests. It will also have frequently asked questions (FAQs), procedures for filing a complaint and finding out the status of the complaint.

Further, All RTAs shall also set up a user-friendly online mechanism or portal for service requests/ complaints with the following minimum features:

• An option for the investors to directly apply for login credentials in the portal of the RTA after appropriate authentication/validation mechanisms, including One Time Passwords (OTPs). Ease of accessibility to view investor's holdings, lodge service requests/complaints for the respective companies and track the status.

• Display a number of categories in order to enable the investor to choose the most relevant category for lodging service requests/complaints. The system shall also display a list of self-attested documents required for each category.

• On uploading the documents, a URN shall be generated and displayed on the portal. The same shall also be sent to the investor's email id and mobile number respectively registered with RTA.

• At every stage of processing the service requests/complaints, the investor shall receive an alert about the status through SMS and/or email till the matter is concluded. The system shall have a provision for seeking clarifications by the RTAs and submission by the investors in response to the same, including the option of uploading additional documents.

By using URN along with appropriate authentication/validation, the investor can track the status of their service request/complaint on the website/portal of the RTA.

Phase II

The markets regulator then stated that in the second phase, a common website would be created and run by QRTAs starting on July 01 of the following year. Through this website, investors will be directed to specific web-based portals of the relevant RTA for further resolution by entering the name of the listed company. This website will have the ability to add businesses and RTAs as needed to its search list.

The RTAs that deal in the folios of listed firms can use this new design. Furthermore, the listed firm must ensure that the new RTA complies with the requirements of this circular when moving the business from one RTA to another.

Having said that, the regulator has asked RTAs to provide a certificate of compliance from a practising Company Secretary within 30 days of the implementation of Phase I, attesting to the implementation of new operating procedures, systems, and other changes necessary to comply with the directives of this circular.

All investors with an email address and/or mobile number must get an electronic notification from the RTAs informing them of the existence of this specific online method. The availability of this mechanism will also be disclosed on the websites of listed firms and RTAs.

SEBI has directed that the aforesaid online system, along with a functional website, shall be implemented by qualified RTAs from January 01, 2024, and by all other registered RTAs dealing with listed companies from June 01, 2024. It should be scalable with robust cyber security protocols. Additionally, RTAs are responsible for ensuring that the online method adheres with the Business Continuity Plan (BCP) and Disaster Recovery (DR) standards established by SEBI.

This article first appeared on PersonalFN here