Generating Awareness on the availability of Disputes Resolution Mechanisms at Stock Exchanges against Listed Companies / Registrar to an Issue and Share Transfer Agent

Securities and Exchange Board of India vide its circular dt: January 30, 2023 has directed all listed entities to make its investors holding securities in a physical form about the arbitration mechanism available to these investors.

Q. What are listed entities expected to do pursuant to this circular?

 All listed companies are advised to issue the following intimation as prescribed by SEBI in its circular to all its investors holding securities in physical form:

“If you have any dispute against the listed company and or its Registrar and Share Transfer Agent (RTA) on delay or default in processing your request, as per SEBI circular dt: May 30, 2022, you can file for arbitration with stock exchanges.

Q. Which are these circulars regarding dispute resolution mechanisms which SEBI is asking listed entities to make investors aware about?

SEBI has vide its circular dt: April 8, 2022 read with SEBI circular dt: May 31, 2022 put in place a Standard Operating Procedure (SOP) for operationalizing the resolution of all disputes pertaining to or emanating from investor services such as transfer/transmission  of  shares, demat/remat,  issue  of  duplicate  shares,  transposition  of  holders,  etc.  and  investor entitlements like corporate benefits, dividend, bonus shares, rights entitlements, credit of securities in public issue, interest /coupon payments on securities, etc. SEBI had also stated that Arbitration Mechanism shall be initiated  post  exhausting  all  actions  for resolution of complaints including those received through SCORES Portal. The Arbitration reference shall  be filed  with  the Stock Exchange  where  the  initial complaint has been addressed. These are circulars pursuant to which SEBI is referring regarding the filing of the application in arbitration. SEBI has already asked listed entities to post these circulars on their own websites.

 Q. Is it mandatory that a separate letter in physical form shall be sent to investors holding securities in physical form?

SEBI has asked listed entities to send this message either as an email to the registered mail id of investors or by way of SMSes. SEBI has given leeway to listed companies to either spread the message through digital modes available at the disposal of companies, including website, mobile application, social media handle(s) etc.

Q. Is there any last date by which this message has to be sent to investors?

SEBI has stated that listed companies shall coordinate with RTAs and shall send this communication to all investors holding securities in physical form by February 20, 2023.

Q. What is the role of RTA in this circular? Is it necessary that the listed company should only send this message or would it be fine even if RTA sends this message?

SEBI has further asked RTAs to communicate compliance with this circular i.e. whether the message given by SEBI was sent to investors holding securities in physical form or not and by what means it was sent i.e. by email or SMSes needs to be communicated to SEBI by February 27, 2023 in the specified format. It is not necessary that listed companies shall only send the message. It is fine even if RTA sends this message.

Q. If any listed entity is sending a postal ballot notice or EGM notice or any other notice to investors. Then whether it would be fine if we communicate this message in that notice itself?

Yes. As discussed above SEBI has given leeway to companies to send this message. So it would be absolutely fine if the message is sent by mentioning it in a postal ballot or any other notice being sent to investors.

SEBI has given helpline nos and email id vide this circular for any further assistance in this regard.

Email id is ia_ho@sebi.gov.in and 022 4045 9964

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