TaxTMI 
TaxTMI 
Master Circular for Underwriters registered with SEBI
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.... 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: [email protected] 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. The entities have independent Board of Directors. Independent Board of Directors for this purpose means that common directors should not be in majority in both the Boards. 1.1.3. There is a....
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....l 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 [email protected]. 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 force ii. Change in Director, including managing director/ whole-time director iii. In case of a partnership firm any change in partners not amounting to dissolution of the firm iv. Change in shareholding not resulting in change....
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....aid. • 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 operationalize SEBI Intermediary Portal (https://siportal.sebi.gov.in) for the intermediaries to submit all the registration applications onli....
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....ose 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 ([email protected]) and Phone No. - 91-XXXXXXXXXX. Yoy may also approach CEO / Partner / Proptirtor (Name) / email-id ([email protected]) and Phone No. - 91-XXXXXXXXXX. If not satisfied with the response of the intermediary you can lodge your grievances with SEBI at http://scores.gov.in or you may also write to any of the offices of SEBI. For any queries, feedback or assistance, pleas....
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....p; Name: Designation: Company Seal: Note: A scanned copy to be sent by email to [email protected] followed by hard copy to Office of the Investor Assistance and Education, Securities and Exchange Board of India, Plot No. C4-A, 'G' Block, Bandra Kurla Complex, Mumbai - 400 051 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....
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....complaints in the SCORES system by logging in with their user id and password which will be communicated separately. 6.8. A daily alert on pending complaints will be forwarded at the e-mail ID registered with SEBI for regulatory communications. 6.9. All listed companies and SEBI registered intermediaries shall review their investors grievances redressal mechanism so as to further strengthen it and correct the existing shortcomings, if any. The listed companies and SEBI registered intermediaries to whom complaints are forwarded through SCORES, shall take immediate efforts on receipt of a complaint, for its resolution, within thirty days. The listed companies 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 int....
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..... To enhance investor satisfaction on complaint redressal, SEBI has already put in place a 'Complaint Review facility' under SCORES wherein an investor if unsatisfied with the redressal may within 15 days from the date of closure of his complaint in SCORES opt for review of the complaint and the complaint shall be escalated 6.18. Effective from August 01, 2018, following procedure shall be followed for filing and redressal of investor grievances using SCORES: 6.18.1. Investors who wish to lodge a complaint on SCORES are requested to register themselves on www.scores.gov.in by clicking on "Register here". While filing the registration form, details like Name of the investor, PAN, Contact details, Email id, Aadhaar card number (optional), CKYC ID(optional) 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 ....
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.... verification. 7.1.3. Access to Blogs/Chat forums/Messenger sites etc. should either be restricted under supervision or access should not be allowed. 7.1.4. Logs for any usage of such Blogs/Chat forums/Messenger sites (called by any nomenclature) shall be treated as records and the same should be maintained as specified by the respective Regulations which govern the concerned intermediary. 7.1.5. Employees should be directed that any market related news received by them either in their official mail/personal mail/blog or in any other manner, should be forwarded only after the same has been seen and approved by the concerned Intermediary's Compliance Officer. If an employee fails to do so, he/she shall be deemed to have violated the various provisions contained in SEBI Act/Rules/Regulations 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, countr....
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....ends on several factors, including the scope and materiality of the outsourced activity, etc. The factors that could help in considering materiality in a risk management programme include: a. The impact of failure of a third party to adequately perform the activity on the financial, reputational and operational performance of the intermediary and on the investors / clients; b. Ability of the intermediary to cope up with the work, in case of non performance or failure by a third party by having suitable back-up arrangements; c. Regulatory status of the third party, including its fitness and probity status; d. Situations involving conflict of interest between the intermediary and the third party and the measures put in place by the intermediary to address such potential conflicts, 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 ....
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....s performance. 4.1 It is important that the intermediary exercises due care, skill, and diligence in the selection of the third party to ensure that the third party has the ability and capacity to undertake the provision of the service effectively. 4.2 The due diligence undertaken by an intermediary shall include assessment of: a. third party's resources and capabilities, including financial soundness, to perform the outsourcing work within the timelines fixed; b. compatibility of the practices and systems of the third party with the intermediary's requirements and objectives; c. market feedback of the prospective third party's business reputation and track record of their services rendered in the past; d. level of concentration of the outsourced arrangements with a single third party; and 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 right....
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.... oversight and management of the arrangements when intermediary outsources its activities to foreign third party. For example, the contract shall include choice-of-law provisions and agreement covenants and jurisdictional covenants that provide for adjudication of disputes between the parties under the laws of a specific jurisdiction; l. neither prevents nor impedes the intermediary from meeting its respective regulatory obligations, nor the regulator from exercising its regulatory powers; and m. provides for the intermediary and /or the regulator or the persons authorized by it to have the ability to inspect, access all books, records and information relevant to the outsourced activity with the third party. 6 The intermediary and its third parties shall establish and maintain contingency plans, including a plan for disaster recovery and periodic testing of backup facilities. 6.1 Specific contingency 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 t....
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.... The intermediaries desirous of outsourcing their activities shall not, however, outsource their core business activities and compliance functions. A few examples of core business activities may be - execution of orders and monitoring of trading activities of clients in case of stock brokers; dematerialisation of securities in case of depository participants; investment related activities in case of Mutual Funds and Portfolio Managers. Regarding Know Your Client (KYC) requirements, the intermediaries shall comply with the provisions of SEBI {KYC (Know Your Client) Registration Agency} Regulations, 2011 and Guidelines issued there under from time to time. 8.3. Other Obligations i. Reporting To Financial Intelligence Unit (FIU) - The intermediaries shall be responsible for reporting of any suspicious transactions / reports to FIU or any other competent authority in respect of activities carried out by the 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 arran....
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....le source or potential areas of conflict of interest which would impair their abilityto render fair, objective and unbiased services; 9.4.6. endeavor to reduce opportunities for conflict through prescriptive measures such as through information barriers to block or hinder the flow of information from one department/ unit to another, etc.; 9.4.7. place appropriate restrictions on transactions in securities while handling a mandate of issuer or client in respect of such security so as to avoid any conflict; 9.4.8. not deal in securities while in possession of material non published information; 9.4.9. not to communicate the material non published information while dealing insecurities on behalf of others; 9.4.10. not in any way contribute to manipulate the demand for or supply of securities in the market or to influence prices of securities; 9.4.11. not have an incentive structure that encourages sale of products not suiting the risk profile 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 su....
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....ember or clearing member) or its international associates in collaboration with such SEBI-registered intermediary may provide financial services relating to securities market, in IFSC, without forming a separate company, subject to the prior approval of the Board. Schedule I List of Circulars incorporated in Master Circular Footnote no. Circular No. and Date Subject 1 RUW Circular No. 1 (2002-2003) dated September 23, 2002 Conditions for granting registration where a connected persons has been granted registration 2 MIRSD/ DPSIII/ Cir-21/ 08 dated July 07, 2008 Designated e-mail ID for regulatory communication with SEBI 3 CIR/MIRSD/6/2011 dated 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....