Apr 16, 2012

Latest Regulatory Updates on Capital Market

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Latest Regulatory Updates on Capital Market
Securities & Exchange Board of India (SEBI) has issued circular No. CIR/CFD/DIL/3/ 2012 & MIRSD/ Cir-5 /2012 dated 13th April, 2012 in its step towards protecting the interest of investors and simplifying the dealing of investors and intermediaries in securities market. Further, SEBI vide circular No. CIR/MRD/DP/10 /2012 & CIR/MRD/DP/ 11 /2012 dated 13th April, 2012 has also come out with comprehensive circulars on Depositories and governance of Stock Exchanges.
The highlights of the circulars are reproduced as below:
1. Processing of Investor Complaints against Listed Companies

SEBI earlier vide Circular No. CIR/OIAE/2/2011 dated 3rd June, 2011 had prescribed that all the complaints pertaining to listed companies will be electronically sent through SCROES and all the listed companies are required to obtain authentication on SCORES. Now, SEBI has directed the listed companies who are desirous of getting their equity shares listed on stock exchanges to obtain authentication on SCORES before obtaining listing approval from Stock Exchange.

2. Uploading of Existing Clients KYC details in the KYC Registration Agency (KRA) systems

  • SEBI in furtherance to its earlier circulars for simplifying the account opening process of investors through KYC process had developed the KRA system which is a centralized database for KYC records of investors. This system was enforceable for new clients who opened accounts with the intermediaries from 1st January, 2012.
  • Now, SEBI has also directed the intermediaries to send KYC details of clients registered prior to 1st January, 2012 (“existing clients”) to KRA as and when they trade with the intermediary and the KRA are required to upload the same on their systems as per the schedule mentioned below:
  • Existing clients of intermediary who trade/ invest/ deal with it during the below mentioned time period Timeline for intermediary to upload existing clients KYC data on KRA system & send KYC documents to KRA Timeline for KRA to update the record in their system & send acknowledgement to the existing client
    April 16, 2012 – June
    15, 2012
    August 31, 2012 September 30, 2012
    June 16, 2012 – August
    31, 2012
    October 31, 2012 November 30, 2012
    September 1, 2012 –
    October 31, 2012
    November 30, 2012 December 31, 2012
    November 1, 2012 –
    December 31, 2012
    January 31, 2013 February 28, 2013
    January 1, 2013 – February 28, 2013 March 15, 2013 March 31, 2013
  • That the intermediaries & KRAs to upload the KYC data of existing clients who trade after the aforesaid schedule on a continuous basis.
  • It is clarified that intermediaries can send print out of the scanned documents to KRAs instead of original documents as per the aforesaid schedule. Provided, that the original documents should reach the KRAs by 31st March, 2013.
  • That maintaining of physical records of KYCs of investors is not necessary for intermediaries.
  • In case the existing client approaches another intermediary, that intermediary is placed upon the responsibility to update the missing information and to do the In-person verification (if already not done) and send the relevant documents to the KRA.
  • The compliance of the aforesaid circular shall be monitored by the Boards of Asset Management Companies and the Trustees in case of Mutual Funds and by the Board of Directors in case of other intermediaries.

           The detailed circulars issued by SEBI are enclosed.

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