TMI BlogMaster Circular for Underwriters registered with SEBIX X X X Extracts X X X X X X X X Extracts X X X X ..... Regulation and Supervision Department of SEBI to Underwriters. Efforts have been made to incorporate applicable provisions of existing circulars issued by other Departments of SEBI relevant to Underwriters. Yours faithfully, Surabhi Gupta Deputy General Manager Phone No.: 022 -26449315 Email ID: surabhig@sebi.gov.in Table of Contents Particulars Page No. Regulatory Compliance and Periodic Reporting 3 Grievance Redressal Mechanism 8 General obligations 17 Schedule - I - List of Circulars 26 CHAPTER - I - REGULATORY COMPLIANCE AND PERIODIC REPORTING 1. Conditions for granting registration where a connected persons has been granted registration1 1.1. The Board may consider grant of certificate to an applicant, notwithstanding that another entity in the same group has been previously granted registration by the Board, if the following conditions are fulfilled: 1.1.1. The entities are incorporated as separate legal entities. 1.1.2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at prescribed at Annexure I. ANNEXURE I Format for sending the Designated e-mail ID for regulatory communication with SEBI 1. The file should be an excel file. 2. The name of the file and the subject of the email shall specify the type of intermediary and the name of the intermediary. For example Registrar to an issue ABC co. Ltd. 3. The file shall contain the following details: Name Address Category Registration No Designated email id Name of compliance officer The file shall be emailed to intermediary@sebi.gov.in. 3. Periodic Reporting on change in status or constitution SEBI Circular No. CIR/MIRSD/6/2011 dated June 17, 2011 3.1. All underwriters shall report the following change(s) to SEBI on a half-yearly basis within 15 days of expiry of the half-year, commencing from the half-year ended September 30, 2011 : i. Amalgamation, demerger, consolidation or any other kind of corporate restructuring falling within the scope of section 230 of the Companies Act, 2013 or the corresponding provision of any other law for the time being in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int is pending? If yes, steps taken and confirmation that the acquirer shall resolve the same. Details of litigation, if any. That all the fees due to SEBI have been paid. That there will not be any change in the Board of Directors of incumbent, till the time prior approval is granted. That the incumbent shall inform all its existing investors / clients in order to enable them to take informed decision regarding their continuance or otherwise with the entity with new management. 4.1.2. Further, in case the incumbent is a registered stock broker and / or depository participant, in addition to the above, it shall obtain approval / NOC from all the Stock Exchanges / Depositories, where the incumbent is a member / Depository Participant and forward a self-attested copy of the same to SEBI. 4.1.3. The application shall be addressed to Chief General Manager, MIRSD, SEBI . 4.1.4. The prior approval granted by SEBI shall be valid for a period of 180 days from the date of communication. 5. Online Registration Mechanism for Securities Market Intermediaries SEBI Circular No. SEBI/HO/MIRSD/MIRSD1/CIR/P/2017/38 dated May 02, 2017 5.1. SEBI has decided to ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-mail ID of the grievance redressal division/compliance officer exclusively for the purpose of registering complaints by investors. 6.2. The above entities are also advised to display the email ID and other relevant details prominently on their websites and in the various materials/pamphlets/advertisement campaign initiated by them for creating investor awareness. 6.3. As an additional measure and for information of all investors who deal/ invest/ transact in the market, it has now been decided that offices of intermediaries shall prominently display basic information, as provided in Annexure II, about the grievance redressal mechanism available to investors. ANNEXURE II FOR OTHER INTERMEDIARIES Dear Investor, In case of any grievance / complaint against the Intermediary: Please contact compliance officer of the Intermediary ( Name and Address) / email-id (xxx.@email.com) and Phone No. - 91-XXXXXXXXXX. Yoy may also approach CEO / Partner / Proptirtor (Name) / email-id (xxx.@email.com) and Phone No. - 91-XXXXXXXXXX. If not satisfied with the response of the intermediary you can lodge your grievances with SEBI at http://scores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 051 Important: Please note that SCORES has the provision for updating company details by the company itself. Any field (except the e-mail id which is permanent) such as registered office address, name of the RTI/STA, name/details of the compliance officer, telephone numbers, etc should be changed by the company immediately when warranted. ANNEXURE IV FORM - B AUTHENTICATION FOR SCORES BY SEBI REGISTERED INTERMEDIARIES 1. Name of the registered intermediary : 2. Nature of registered intermediary: 3. SEBI registration no. 4. PAN of registered intermediary : 5. Date of SEBI registration of intermediary: 6. SEBI registration valid upto: 7. Office address of the intermediary: 8. The details of the concerned person of the intermediary to whom User id and password will be sent: Name : Designation: Email id : (corporate and permanent email id) Mobile no. Telephone No. : Fax No. : Place: Signature: Date: Name: Designation: Seal: Note: A scanned copy to be sent by email to scores@sebi.gov.in followed by hard copy to the concerned Department/Division of Securities and Exchange Board of India, Plot No. C4-A, 'G&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and SEBI registered intermediaries shall keep the complainant duly informed of the action taken thereon. 6.10. The listed companies and SEBI registered intermediaries shall update the ATR along with supporting documents, if any, electronically in SCORES. ATR in physical form need not be sent to SEBI. The proof of dispatch of the reply of the listed company / SEBI registered intermediary to the concerned investor should also be uploaded in SCORES and preserved by the listed company / SEBI registered intermediary, for future reference. 6.11. Action taken by the listed companies and SEBI registered intermediaries will not be considered as complete if the relevant details/ supporting documents are not uploaded in SCORES and consequently, the complaints will be treated as pending. 6.12. A complaint shall be treated as resolved/disposed/closed only when SEBI disposes/closes the complaint in SCORES. Hence, mere filing of ATR by a listed company or SEBI registered intermediary with respect to a complaint will not mean that the complaint is not pending against them. 6.13. Failure by listed companies and SEBI registered intermediaries to file ATR under SCORES within thirty days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal) etc. (Annexure V) may be provided for effective communication and speedy redressal of the grievances. Upon successful registration, a unique user id and a password shall be communicated to the investor through an acknowledgement email / SMS. ANNEXURE V Details to be provided while registering on SCORES with effect from August 01, 2018: i. Name of the complainant* ii. Pan Number* iii. Aadhaar Number (Optional) iv. CKYC ID (Optional) v. DP id Client Id vi. Postal address for communication* vii. Contact number Mobile* : Landline viii. Email id* For receipt of acknowledgement letter / updates of complaints on SCORES. ix. Bank account details To facilitate direct credit of benefits to investor. x. Client id as given by Broker / Stock Exchange. Note: * are mandatory fields. 6.18.2. An investor shall use login credentials for lodging complaint on SCORES ( Login for registered user section). Details on how to lodge a complaint on SCORES is at Annexure VI. 6.18.3. The complainant may use SCORES to submit the grievance directly to companies / intermediaries and the complaint shall be forwarded to the entity for resolution. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lations etc. and shall be liable for action. The Compliance Officer shall also be held liable for breach of duty in this regard. 8. Guidelines on Outsourcing of Activities by Intermediaries SEBI Circular No. CIR/MIRSD/24/2011 dated December 15, 2011 8.1. Principles for Outsourcing The risks associated with outsourcing may be operational risk, reputational risk, legal risk, country risk, strategic risk, exit-strategy risk, counter party risk, concentration and systemic risk. In order to address the concerns arising from the outsourcing of activities by intermediaries based on the principles advocated by the IOSCO and the experience of Indian markets, SEBI had prepared a concept paper on outsourcing of activities related to services offered by intermediaries. Based on the feedback received on the discussion paper and also discussion held with various intermediaries, stock exchanges and depositories, the principles for outsourcing by intermediaries have been framed (Annexure VII). These principles shall be followed by all intermediaries registered with SEBI. ANNEXURE VII PRINCIPLES FOR OUTSOURCING FOR INTERMEDIARIES 1. An intermediary seeking to outsou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , etc. 2.2 While there shall not be any prohibition on a group entity / associate of the intermediary to act as the third party, systems shall be put in place to have an arm s length distance between the intermediary and the third party in terms of infrastructure, manpower, decision-making, record keeping, etc. for avoidance of potential conflict of interests. Necessary disclosures in this regard shall be made as part of the contractual agreement. It shall be kept in mind that the risk management practices expected to be adopted by an intermediary while outsourcing to a related party or an associate would be identical to those followed while outsourcing to an unrelated party. 2.3 The records relating to all activities outsourced shall be preserved centrally so that the same is readily accessible for review by the Board of the intermediary and / or its senior management, as and when needed. Such records shall be regularly updated and may also form part of the corporate governance review by the management of the intermediary. 2.4 Regular reviews by internal or external auditors of the outsourcing policies, risk management system and requirements of the regulator shall be man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d e. the environment of the foreign country where the third party is located. 5 Outsourcing relationships shall be governed by written contracts / agreements /terms and conditions (as deemed appropriate) {hereinafter referred to as contract } that clearly describe all material aspects of the outsourcing arrangement, including the rights, responsibilities and expectations of the parties to the contract, client confidentiality issues, termination procedures, etc. 5.1 Outsourcing arrangements shall be governed by a clearly defined and legally binding written contract between the intermediary and each of the third parties, the nature and detail of which shall be appropriate to the materiality of the outsourced activity in relation to the ongoing business of the intermediary. 5.2 Care shall be taken to ensure that the outsourcing contract: a. clearly defines what activities are going to be outsourced, including appropriate service and performance levels; b. provides for mutual rights, obligations and responsibilities of the intermediary and the third party, including indemnity by the parties; c. provides for the liability of the third party to the intermediary fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingency plans shall be separately developed for each outsourcing arrangement, as is done in individual business lines. 6.2 An intermediary shall take appropriate steps to assess and address the potential consequence of a business disruption or other problems at the third party level. Notably, it shall consider contingency plans at the third party; co-ordination of contingency plans at both the intermediary and the third party; and contingency plans of the intermediary in the event of non-performance by the third party. 6.3 To ensure business continuity, robust information technology security is a necessity. A breakdown in the IT capacity may impair the ability of the intermediary to fulfill its obligations to other market participants/clients/regulators and could undermine the privacy interests of its customers, harm the intermediary s reputation, and may ultimately impact on its overall operational risk profile. Intermediaries shall, therefore, seek to ensure that third party maintains appropriate IT security and robust disaster recovery capabilities. 6.4 Periodic tests of the critical security procedures and systems and review of the backup facilities shall be undertaken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third parties. ii. Need for Self Assessment of existing Outsourcing Arrangements In view of the changing business activities and complexities of various financial products, intermediaries shall conduct a self assessment of their existing outsourcing arrangements within a time bound plan, not later than six months from the date of issuance of this circular and bring them in line with the requirements of the guidelines/principles. 9. General Guidelines for dealing with conflicts of interest SEBI Circular No. CIR/MIRSD/5/2013 dated August 27, 2013 9.1. All intermediaries, recognised stock exchanges, recognised clearing corporations and depositories (hereinafter collectively referred to as such entities ) are presently governed by the provisions for avoidance of conflict of interest as mandated in the respective regulations read with relevant circulars issued from time to time by SEBI. On the lines of Principle 8 of the International Organisation of Securities Commissions (IOSCO) Objectives and Principles of Securities Regulations, it has been decided to put in place comprehensive guidelines to collectively cover such entities and their associated persons, for eliminat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile of their clients; 9.4.12. not share information received from clients or pertaining to them, obtained as a result of their dealings, for their personal interest; 9.5. The Boards of such entities shall put in place systems for implementation of this circular and provide necessary guidance enabling identification, elimination or management of conflict of interest situations. The Boards shall review the compliance of this circular periodically. 9.6. Such entities shall conduct assessment of their existing policies on conflict of interest in a time bound manner, not later than 6 months from the date of this circular and bring them in line with the requirements of these guidelines. 9.7. The said guidelines shall be in addition to the provisions, if any, contained in respective regulations/ circulars issued by the Board from time to time regarding dealing with conflict of interest, in respect of such entities. 10. Digital Mode of Payment SEBI Circular No. SEBI/HO/GSD/T A/CIR/P/2017/42 dated May 16, 2017 10.1. SEBI has notified the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017 on March 06, 2017 to enable digital mode of payment (RTGS/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted June 17, 2011 Periodical report- Grant of prior approval to underwriters 4 CIR/MIRSD/14/2011 dated August 02, 2011 Revised procedure for seeking prior approval for change in control through single window 5 SEBI Circular No. SEBI/HO/MIRSD/MIRSD1/CIR/P/2017/38 dated May 02, 2017 Online Registration Mechanism for Securities Market Intermediaries 6 MIRSD/DPS III/Cir-01/07 dated January 22, 2007, Exclusive e-mail ID for redressal of Investor Complaints CIR/MIRSD/17/2011 dated August 24, 2011, Processing of Investor Complaints in SEBI Complaints Redress System (SCORES) CIR/MIRSD/3/2014 dated August 28, 2014 Information regarding Grievance Redressal Mechanism CIR/OIAE/1/2014 dated December 18, 201 Redressal of investor grievances through SEBI Complaints Redress System (SCORES) platform SEBI/HO/OIAE/IGRD/CIR/P/2018/58 dated March 26, 2018 Investor g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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