Code of Conduct: The registrars to an issue and the share transfer have to maintain high standards of integrity and fairness in all the dealings with clients and other registrars to issue and share transfer agents in the conduct of business. They are also to act with due skill, diligence and care in the conduct of all their activities. Further, they should not indulge in unfair competition while competing for or executing any assignment. Moreover, they should not make any exaggerated statement, whether oral or written, to the clients either about their qualification or capability to render certain services or their achievements in regard to the services rendered to other clients. Similarly, they should not divulge to other clients, press or any other party any confidential information about their clients, which has come to their knowledge. They should endeavor to ensure that (1) enquires from investors are adequately dealt with and (2) adequate steps are taken for proper allotment of securities and refund of application money without delay and as per the law. Also, they should not generally and particularly in respect of any dealings in securities be party to (1) creation of false market; (2) price rigging or manipulation; (3) passing of unpublished price sensitive information to brokers, members of the stock exchanges and other intermediaries in the securities market or take any other action which is not in the interest of the investors; and (4) no registrar to issue, share transfer agent or any of its directors partners or managers managing all the affairs of their business should either in their respective accounts or through their associates or family members, relatives or friends indulge in any insider trading.
Maintenance of Records: The registrars and transfer agents have to maintain records relating to all applications received from investors in respect of an issue, all rejected applications together with reasons, basis of allotment of securities in consultation with the stock exchanges, terms and conditions of purchase of securities, allotment of securities, list of allotees and non-allotees, refund orders sent so on. In addition, they should also keep a record of the list of holders of securities of corporates, the names of transferors and transferees and the dates of transfer of securities. The SEBI is empowered to require the registrars and transfer agents to file books of accounts, and records and so on. These have to be preserved by them for a period of three years.
The SEBI is authorized to undertake inspection of the books of accounts, other records and documents of the registrars and transfer agents to ensure that they are being maintained in a proper manner and the provisions of the SEBI Act, rules, regulations and the provisions of the SCRA and the relevant rules are complied with, to investigate into complaints from investors/other registrars and transfer agents/other intermediaries in the securities market or any matter relating to their activities and to investigate on its own in the interest of securities market / investors into their affairs. One the basis of the inspection report, the SEBI can direct the concerned party to take such measures as it deems fit in the circumstances. It can also appoint a qualified auditor to investigate into the books of accounts and affairs of the registrars and transfer agents.
Action in Default:
A registrar/transfer agent who fails to comply with any condition subject to which registration is granted, contravenes any of the provisions of the SEBI Act/SCRA, rules/ regulations and stock exchange byelaws, rules and regulation is liable to suspension or cancellation of registration.
The penalty for suspension is imposed for (1) violations of the provisions of the SEBI Act, rules/regulations, (2) non-observance of the code of conduct , (3) failure to furnish information, furnishing of wrong/false information, non-submission of periodical records and non-cooperation in any enquiry, (4) failure to resolve investor complaints/give a satisfactory reply to the SEBI in this behalf, (5) involvement in manipulation/price rigging/cornering activities, (6) guilty of misconduct/improper business like or unprofessional conduct, (7) failure to maintain capital adequacy requirement/to pay the requisite fee and (8) violation of the condition of registration.