Chapter III of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 enumerates common obligations of listed entities. In this post, we will discuss some of these obligations related to Key Managerial Personnel, Compliance officer and Share Transfer Agent.
General Obligation of Compliance
The listed entity shall ensure that key managerial personnel, directors, promoters or any other person dealing with the listed entity, complies with responsibilities or obligations, if any, assigned to them under these regulations. [Regulation 5]
This is obligation of listed entity to ensure that certain persons comply with responsibilities or obligations assigned to them under these regulations. These persons are:
- Key managerial personnel;
- Chief Executive Officer or Managing Director or Manager,
- Company Secretary,
- Whole time director
- Chief Financial Officer,
- Such other person prescribed under the Companies Act, 2013;
- Directors,
- Promoters, and
- Other persons dealing with the listed entity
All these persons have duty to comply with responsibilities or obligations assigned to them under these regulation. These duties under the regulations may be assigned directly by these regulations and also by the company.
Compliance Officer and his Obligations
Compliance Officer
A listed entity shall appoint a qualified company secretary as the compliance officer. [Regulation 6(1)]
A listed entity as discussed earlier may or may not be a company. It need not be a public company, but a private company with listed debt securities may be a listed entity. All these entities shall appoint a qualified company secretary. Company Secretary means a person who is member of the Institute of Company Secretaries of India (ICSI). [Section 2(c) of the Companies Secretaries Act, 1980]
Responsibilities of Compliance Officer
The compliance officer of the listed entity shall be responsible for-
(a) ensuring conformity with the regulatory provisions applicable to the listed entity in letter and spirit.
(b) co-ordination with and reporting to the Board, recognised stock exchange(s) and depositories with respect to compliance with rules, regulations and other directives of these authorities in manner as specified from time to time.
(c) ensuring that the correct procedures have been followed that would result in the correctness, authenticity and comprehensiveness of the information, statements and reports filed by the listed entity under these regulations.
(d) monitoring email address of grievance redressal division as designated by the listed entity for the purpose of registering complaints by investors. [Regulation 6(2)]
All laws should be complied with in letter and spirit. Regulation 6(2) made it clear in relation to these regulations. The Compliance Officer is primary responsible for compliance of law by the listed entity. Compliance Officer shall also monitor email address of grievance redressal division. Monitor of email address does not mean reading and replying mails address to that address but to monitor the process. To monitor means to observe and check the progress or quality of (something) over a period of time; keep under systematic review; keep regular surveillance over.
The requirements of this regulation shall not be applicable in the case of units issued by mutual funds which are listed on recognised stock exchange(s) but shall be governed by the provisions of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996. [Proviso to Regulation 6(2)]
Share Transfer Agent
The listed entity shall appoint a share transfer agent or manage the share transfer facility in-house. [Regulation 7(1)]
In – house share transfer facility
In the case of in-house share transfer facility, as and when the total number of holders of securities of the listed entity exceeds one lakh, the listed entity shall either register with the Board as a Category II share transfer agent or appoint Registrar to an issue and share transfer agent registered with the Board. [Proviso to Regulation 7(1)]
Option to have in – house share transfer facility is available for relatively small listed entities where total numbers of holders of securities are up to one lakh. When numbers of the holders exceeds one lakh, either such in – house facility be registered as Category II share transfer agent registered with SEBI or discontinue such facility. On discontinuation of such facility, Registrar to an issue and stare transfer agent registered with SEBI shall be appointed by the listed entities.
The listed entity shall ensure that all activities in relation to both physical and electronic share transfer facility are maintained either in house or by Registrar to an issue and share transfer agent registered with the Board. [Regulation 7(2)]
Compliance Certificate by Compliance Officer and Share Transfer Agent
The listed entity shall submit a compliance certificate to the exchange, duly signed by both the compliance officer of the listed entity and the authorised representative of the share transfer agent, wherever applicable, within one month of end of each half of the financial year, certifying compliance with the requirements of sub- regulation (2). [Regulation 7(3)]
New Share Transfer Agent
In case of any change or appointment of a new share transfer agent, the listed entity shall enter into a tripartite agreement between the existing share transfer agent, the new share transfer agent and the listed entity, in the manner as specified by the Board from time to time. [Regulation 7(4)]
In case the existing share transfer facility is managed in-house, the agreement referred above shall be entered into between the listed entity and the new share transfer agent. [Proviso to Regulation 7(4)]
The listed entity shall intimate such appointment, referred to in sub-regulation (4), to the stock exchange(s) within seven days of entering into the agreement. [Regulation 7(5)]
The agreement referred to in sub-regulation (4) shall be placed in the subsequent meeting of the board of directors. [Regulation 7(6)]
The listed entity shall have no obligation to take prior or subsequent board approval for appointment of share transfer agent. Only requirement is to place agreement in subsequent meeting of board of directors. Board of directors may take note of such agreement.
The requirements of this regulation shall not be applicable to the units issued by mutual funds that are listed on recognised stock exchange(s). [Proviso to Regulation 7]
Please note: This blog invite readers to share their comments, suggestions, hardship, queries and everything in comment section. This blog post is not a professional advice but just a knowledge sharing initiative for mutual discussion.
AishMGhrana 
I think and believe the letters as written are fine. But how far being in —-action I have some negative remarks over SEBI itself. I have been observing Compliance Officer for last 4 years, Company Secretary/ Secretarial Auditors for last 24 years and all. Where there is a power – money and all, the letters are useless. Whatsoever strong / compliance requirement may be.and Act may be. God save us.
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I agree sir.
Simple and sure compliance are key, not complex and corrupt compliance.
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Yes , Sirji, Corrupt compliance is essence and object in avoidance of Process and Law.. This reminds me my Old Dave Kaka , Popular Name in C S world Ahmedabad , next to Bipin Acharya . He was attending , Now No More in this world, whosoever come ( Company , Person ) for compliance Certificate ( Secretarial Audit) he was first asking a question , Do you require Compliance Certificate , or Certificate? I can not give a Certificate unless I take all records seen fully. This is the spirit of Law and compliance of law. Such and full law compliance is essence of Law.
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