In the current fast-paced investment environment, mutual fund investors, publicly-traded companies, and financial institutions have multiple investors who perform a number of transactions in a day like buy, sell or switch of share units and also require accurate records or information regarding the same.
So, you must be wondering who takes care of such records for both mutual fund companies and investors?
Here is the answer.
CAMS, Karvy, alankit, datamatics and SAG RTA are some of the popular third-party entities who performs the record keeping duties for financial institutions and are also popularly known as registrar and share transfer agents (RTAs).
Who are Registrar and Share Transfer Agents (RTAs)?
Registrar and share transfer agents (RTAs) are the authorized trusts or institutions, who are established with the purpose of maintaining accurate records of the investor's transactions in order to provide extreme convenience to the mutual fund or other financial institutions. Some of the major finance companies choose to act as their own transfer agents but also choose a third-party RTAs like CAMS, Kav and SAG RTA for availing their record keeping services.
What are the Key Services offered by RTAs?
The key services offered by RTAs include processing of both financial and non-financial transactions, buying/selling records as well as managing changes in the investor personal data.
Similarly, if we talk about SAG RTA-Rajasthan's First SEBI-approved RTA Service Provider, alankit assignment has also marked in country with the great achievements to deliver services over 6 million investors and also handle many physical transactions each year. The main services provided by the R&T agent companies are:
- Dematerialization of Securities through NSDL or CDSL depositories
- Investor record keeping and transfer of securities
- Share certificate transfer
- Regulatory reporting services
- Provide Information to investors about new fund offers
- Payout of Dividend/Interest and ECS transfer
- Revalidation of Dividend
- IEPF claim settlement
Registrar and share transfer company is also responsible for managing all the meetings, mailing, and reporting activities along with regulatory reporting to the authorities every time it is required on behalf of investors.
How do RTAs help Investors?
RTAs, basically, act as a third-party service provider on behalf of a fund house. These RTAs also have a nationwide network comprising of branches across distinct locations to assist investors in their day-to-day transactions. So, all-in-all RTAs acts as a single window-system for investors. For example, SAG RTA serves as a one-stop shop for all the investors in terms of offering them detailed information about different investment schemes of district fund houses.
What is the RTA Registration Procedure with SEBI?
The Securities and Exchange Board of India, which is popularly known as SEBI is the key entity who is responsible for governing the two major depositories (NSDL & CDSL) in India along with DP participants. These DP participants are generally the registrar and transfer agents. So, these DPs can be a financial institution, a broker, or any SEBI authorized entity that act as a third party. who understand the online share transfer process.
As SEBI governs and designates the RTA, it is important for RTAs to get registered under SEBI, which also requires approval from NSDl or CDSL - two key depositories currently operative in India.
For instance, SAG RTA is officially registered as an RTA service provider in the Central Depository Services Limited (CDSL) RTA list. Therefore, the recommendation from CDSL allows the SAG RTA to be among the top SEBI-approved RTA Service Provider in India.
Talking more about RTA registration procedure, there are 2 categories under RTA service provider for the registration as registrar to an issue or transfer agent in SEBI.
Further, the applicant along with prescribed non-refundable fees of INR 6 lakhs for category 1 and INR 2 lakhs for category 2 will have to file for registration as per Form A. Note that the SEBI keeps all the rights to reject the application and may also call the applicant in person. After the background verification, SEBI will finalize the registration with Form B along with the fees prescribed by the board.