The effective date of this Circular is January 1, 2022. According to a SEBI circular dated November 3, 2021, the following rules regarding KYC requirements and investor service have been made known:
- Standardized procedures for handling investor service requests: – Minimal Signature Mismatch
- If there is a minor signature mismatch, RTA will notify the holder by speed post and give them 15 days to object before processing the service request.
- If the letter mentioned above from RTA isn’t received, RTA will need to request signature confirmation from the bank.
- Substantial Mismatch in Signature: RTA must request signature verification on Form ISR-2 along with a canceled check if there is a major mismatch in the signature or if the signature is not present in its records.
- PAN submission: PAN submission was previously required, but now RTA must have the PAN
- Change of Address: The RTA must notify holders at both the old and new addresses of the change of address.
If the notification mentioned above letter is returned as undeliverable or if a complaint is made, the RTA will request proof of the old address, a counterfoil of the dividend warrant, or a bank statement showing dividend credit.
- Self-attestation to replace affidavits and notarization: For all Service Requests other than Transmission, copies of documents submitted in hard copy must be self-attested in order for RTA to process them. Document notarization is not a requirement set by RTA.
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Provision of PAN, KYC, and Nomination is required:
- All owners of tangible securities in a listed firm shall be required to provide the following documentation:
- Nomination for PAN (Form SH-13) (For SH-14 for change of Nomination)
- Contact Information (Address, Mobile number, E-mail)
- Particular Signature
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Folios without a PAN, KYC, or nomination are frozen:
- The Folios that don’t have any of the 4 updates as mentioned above on or before April 1, 2023, will be frozen by RTA.
- The Folios frozen will only be able to file a service request or grievance with RTA after providing all necessary information (4 details) as stated above.
- Only after providing all four of the required details (the “full details”) as outlined above can the Folios Frozen dividend be paid.
- If the Folios are still frozen as of December 31, 2025, RTA must report them to PMLA authorities (Enforcement Directorate)
- Upon receiving the four facts mentioned above or the dematerialization of shares, the RTA shall return the frozen folio to normal status.
PAN, KYC information, and Physical Shareholder Nomination are all required disclosures
The Securities and Exchange Board of India (SEBI) has made it mandatory to provide PAN, email address, mobile number, bank account details, and nomination by Physical Shareholders in its circular No. SEBI/HO/MIRSD/MIRSD RTAMB/P/CIR/2021/655 dated 3rd November 2021 and subsequent clarification dated 14th December 2021.
According to the circular mentioned above, physical shareholders’ folios that lack any of the aforementioned information—such as a PAN, email address, mobile number, bank account information, or nomination—must be frozen as of April 1st, 2023. Physical shareholders who fail to comply will not be permitted to file a complaint with the company’s Registrar and Transfer Agent (RTA) or request services from them, and they will also not be permitted to receive dividends in physical form.
Additionally, shareholders who possess shares in physical form are urged to link their PAN to their Aadhaar by March 31, 2022, or by any other date the Central Board of Direct Taxes may specify, in order to prevent their folio from being frozen.
Additionally, after December 31, 2025, RTA/Company shall send the frozen folios to the administering body under the Benami Transactions (Prohibitions) Act, 1988, and/or the Prevention of Money Laundering Act, 2002, in accordance with the SEBI circular mentioned above.