Regulation 7 - Grant of certificate of registration - Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018

Grant of certificate of registration 7. After considering the application under regulation 3, with reference to the qualifications specified in regulation 6, if the Board is satisfied that the company established by the applicant is eligible to act as depository, it may grant a certificate of registration in Form B of the First Schedule to the depository subject to the following, namely :- (a) the depository shall pay the registration fee specified in Part A of the Second Schedule in the manner specified in Part B thereof, within fifteen days of receipt of intimation from the Board; (b) the depository shall comply with the provisions of the Act, the Depositories Act, the bye-laws, agreements and these regulations ; 1 [ (c) (i) ] the depository shall not carry on any activity whether involving deployment of funds or otherwise without prior approval of the Board: Provided that prior approval of the Board shall not be required in case of treasury investments if such investments are as per the investment policy approved by the governing board of depository. Provided further that a depository may carry out such activity not incidental to its activities as a depository, whether involving deployment of funds or otherwise, as may be assigned to the depository by the Central Government or by a regulator in the financial sector, through the establishment of Strategic Business Unit(s) specific to each activity with the prior approval of the Board and subject to such conditions as may be prescribed by the Board, including transfer of such activity to a separate company within such time as may be specified by the Board having regard to the matters which are relevant to the efficient and orderly function of the Depository as mentioned in regulation 14. 2 [ (ii) An employee of a depository shall not simultaneously be an employee of any other company where the depository has invested. (iii) A director, committee member or employee of a depository shall not receive any compensation or any other financial benefit from the companies where the depository has invested, other than fees and expenses related to the governing board and committee meetings. ] Explanation: For the purposes of this clause, a Strategic Business Unit shall be an organizational unit of a company with its own mission, objectives and business strategy that is given the responsibility to serve the particular demands of one business area with appropriate technological, financial and other segregations. (d) the shareholding of the applicant in the depository shall be locked-in for a period of five years from the date of grant of registration by the Board. (e) the depository complies with the shareholding and governance structure requirements specified in these regulations; (f) if any information previously submitted by the depository or the applicant to the Board is found to be false or misleading in any material particular, or if there is any change in such information, the depository shall forthwith inform the Board in writing; (g) the depository shall redress the grievances of the participants and the beneficial owners within 3 [ twenty-one calendar days ] of the date of receipt of any complaint from a participant or a beneficial owner and keep the Board informed about the number and the nature of redressals; (h) the depository shall make an application for commencement of business under regulation 11 within one year from the date of grant of certificate of registration under this regulation; and (i) the depository shall amend its bye-laws from time to time as may be directed by the Board; (j) any other condition as the Board may deem fit in the interest of securities market. ************ NOTES:- 1. Re-Numbered vide Notification No. SEBI/LAD-NRO/GN/2023/125 dated 28-02-2023 (shall come into force on the one hundred and eightieth day from the date of their publication in the Official Gazette) before it was read as, (c) 2. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/125 dated 28-02-2023 (shall come into force on the one hundred and eightieth day from the date of their publication in the Official Gazette) 3. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/146 dated 16-08-2023 before it was read as, thirty days