SEBI extends timeline to add nominee to demat accounts

Capital markets regulator SEBI (Securities and Exchange Board of India) has extended timelines for nomination in demat accounts and for submission of PAN, nomination, and KYC details by physical security holders. The deadline has also been extended for the “voluntary nomination” of trading accounts.

The latest decision comes after SEBI, in its July circular for trading and demat accounts, said the accounts that do not have a ‘choice of nomination’ by September 30, 2023, will be frozen.

The current decision, as per SEBI, was taken after representations from the exchanges, depositories, brokers’ associations, and various other stakeholders.

After the revision, now the submission of ‘choice of nomination’ for trading accounts has been made "voluntary", a step that'll help towards the 'ease of doing business'.

With respect to demat accounts, SEBI has extended the last date for submission of ‘choice of nomination’ to December 31, 2023.

For physical security holders, the earlier deadline to submit PAN, nomination, contact details, bank account details, and specimen signature was September 30, 2023.

SEBI has asked stock exchanges, depositories, registrar and transfer agents (RTAs), and listed companies to take necessary steps to implement the provisions of the circular, including making necessary amendments to the bylaws or rules.

They'll also bring the provisions of this circular to the notice of their respective constituents and also disseminate it on their websites.

Via another circular, the regulator has announced the redressal of “investor grievances” via the SEBI Complaint Redressal (SCORES) platform and linked it to the "online dispute resolution” platform.

This, says SEBI, will strengthen the existing investor grievance handling mechanism. It is aimed at making the entire redressal process of grievances in the securities market comprehensive.

In a revised framework for the handling of complaints received via the SCORES platform for entities and for monitoring the complaints, SEBI says all entities in receipt of the complaints of the investors via SCORES will resolve the complaint in 21 calendar days.

The complaint lodged on SCORES will be automatically forwarded to the entity concerned via SCORES for resolution and submission of an action taken report (ATR). The complaint will simultaneously be forwarded via SCORES to the relevant designated body, which will monitor the ATRs and inform them about any changes.

For failure to redress investor complaints by listed companies, the designated stock exchange will levy ₹1,000 per day fine per complaint on the company for violation of the rules. The depositories will immediately freeze such demat accounts and also intimate the promoters.

In case the listed entity fails to pay the fine or resolve the complaint, the exchange may initiate other action, including sharing of info with other exchanges. Upon exhaustion of all options, if the number of pending complaints exceeds 20 or the value involved in such complaints is more than ₹10 lakh, stock exchanges will forward all the complaints to SEBI for further action.