Understanding the Role and Services of Registrar and Transfer Agents (RTAs)

Introduction

Despite being recognized as a separate legal entity, a company requires assistance from various authorities and corporate bodies to establish its compliance and regulatory framework. One key authority in this process is the Registrar and Transfer Agent (RTA). An RTA is appointed by a company to maintain security ownership records, facilitating the smooth transfer of securities and acting as an intermediary.

Roles of RTA: Registrar and Share Transfer Agent

An RTA encompasses two primary functions: that of a registrar and a share transfer agent. Though they may be provided by the same entity, their responsibilities differ significantly.

Registrar

A registrar is tasked with maintaining accurate records of a company's investors, including shareholders, promoters, and their associated groups. Key responsibilities of a registrar include:

• Maintaining a comprehensive register of shareholders, including personal and contact details.
• Updating investor records and issuing account statements.
• Processing transactions related to share ownership.

Registrar responsibilities are typically delegated by a body corporate and include the following activities:

• Collecting applications from investors concerning new issues.
• Maintaining accurate records of applications and any monies involved.
• Assisting the body corporate to:
  • Determine the allotment basis in consultation with the stock exchange.
  • Finalize the list of individuals eligible for allotment.
  • Process and dispatch allotment letters, refunds, and other relevant documents.

Share Transfer Agent

A share transfer agent is specialized in managing the transfer of ownership of securities and involves:

• Maintaining records of securities ownership.
• Issuing and redeeming mutual fund units.
• Updating ownership records and processing related transactions.

The share transfer agent performs specific tasks, which include:

• Endorsing certificates for allotment or call monies.
• Processing transmission, consolidation, or subdivision of securities.
• Dispatching transferred securities and processing received securities.
• Canceling the names and certificates of shareholders who sell their shares while issuing new certificates to the new shareholders.

While it is possible for a registrar and transfer agent to be separate entities, companies often prefer to engage a single entity for efficiency and cost-effectiveness.

Services Offered by RTA

The RTA provides a centralized approach to both financial and non-financial transactions and offers a range of essential services:

• Processing Transactions: Handling both financial and non-financial activities, including updates in investor data.

The primary services include:

• Dematerialization of securities through depositories like NSDL or CDSL.
• Maintaining investor records and managing the transfer of securities.
• Transferring share certificates.
• Regulating reporting services.
• Providing new fund offer updates to investors.
• Managing dividend and interest payouts, including ECS transfers.
• Validating dividends as necessary.

Top Registrar and Transfer Agents in India

In India, two prominent RTAs are Computer Age Management Services (CAMS) and Karvy. Furthermore, various additional RTAs operate in the marketplace, with over 200 listed on the CDSL website and at least 100 registered on the NSDL website. Investors can access a comprehensive list of these entities via the respective websites of CDSL and NSDL.