SEBI approves revamped regulations for registrar, share transfer agents; check details
SEBI has sanctioned new activity-based rules for Registrar and Transfer Agents (RTAs), dividing regulatory responsibilities for listed and unlisted firms.
- Sep 12, 2025,
- Updated Sep 12, 2025 7:29 PM IST
The Securities and Exchange Board of India (SEBI) has approved a new regulatory framework for Registrar and Transfer Agents (RTAs), introducing activity-based regulations that distinctly separate the services provided to listed and unlisted companies. According to SEBI’s findings, RTAs currently serve nearly 35,000 unlisted companies compared to approximately 4,000 listed entities, necessitating clearer regulatory boundaries to avoid overlap between jurisdictions.
Under the new framework, services offered by RTAs to listed companies will remain under SEBI’s direct oversight, while those related to unlisted entities will fall under the purview of the Ministry of Corporate Affairs (MCA). RTAs wishing to provide services to both listed and unlisted companies and remain registered with SEBI must establish Separate Business Units (SBUs) for unlisted company functions. These SBUs are required to be segregated and ring-fenced from listed company activities, ensuring an arms-length relationship. The MCA will supervise these SBUs, including handling investor complaints related to unlisted securities, while SEBI continues to address grievances concerning listed firms.
The regulations abolish the existing categorisation of RTAs, opting instead for a single definition and a unified minimum net worth requirement of Rs. 50 lakhs at all times. For RTAs operating both listed and unlisted businesses, the net worth calculation will exclude the SBU’s accounts. Existing RTAs are being provided a transition period to set up these SBUs. RTAs servicing Mutual Fund (MF) folios and Alternative Investment Funds (AIFs) will remain within SEBI’s regulatory domain, as these relate to listed securities.
SEBI has adopted a similar multi-regulator approach in other market intermediaries such as Credit Rating Agencies, Custodians of Securities, and Debenture Trustees, where activities span more than one regulatory domain. This revised oversight structure is expected to clarify compliance obligations and ensure investor protection in both listed and unlisted markets. The new rules are designed to adapt to the increasing focus on dematerialisation and the substantial influx of unlisted company activity in the Indian capital markets.
To bolster internal controls and prevent fraud such as unauthorised share transfers, share certificate forgery, dividend fraud, and data manipulation, SEBI’s updated regulations introduce robust institutional mechanisms for RTAs. These require the implementation of comprehensive Know Your Customer (KYC) surveillance systems to verify security holders’ identities, in addition to whistle-blower protocols, escalation, and reporting mechanisms. Such frameworks, already established for mutual funds and brokers, are now extended to RTAs to enhance transparency and accountability within the sector.
The Securities and Exchange Board of India (SEBI) has approved a new regulatory framework for Registrar and Transfer Agents (RTAs), introducing activity-based regulations that distinctly separate the services provided to listed and unlisted companies. According to SEBI’s findings, RTAs currently serve nearly 35,000 unlisted companies compared to approximately 4,000 listed entities, necessitating clearer regulatory boundaries to avoid overlap between jurisdictions.
Under the new framework, services offered by RTAs to listed companies will remain under SEBI’s direct oversight, while those related to unlisted entities will fall under the purview of the Ministry of Corporate Affairs (MCA). RTAs wishing to provide services to both listed and unlisted companies and remain registered with SEBI must establish Separate Business Units (SBUs) for unlisted company functions. These SBUs are required to be segregated and ring-fenced from listed company activities, ensuring an arms-length relationship. The MCA will supervise these SBUs, including handling investor complaints related to unlisted securities, while SEBI continues to address grievances concerning listed firms.
The regulations abolish the existing categorisation of RTAs, opting instead for a single definition and a unified minimum net worth requirement of Rs. 50 lakhs at all times. For RTAs operating both listed and unlisted businesses, the net worth calculation will exclude the SBU’s accounts. Existing RTAs are being provided a transition period to set up these SBUs. RTAs servicing Mutual Fund (MF) folios and Alternative Investment Funds (AIFs) will remain within SEBI’s regulatory domain, as these relate to listed securities.
SEBI has adopted a similar multi-regulator approach in other market intermediaries such as Credit Rating Agencies, Custodians of Securities, and Debenture Trustees, where activities span more than one regulatory domain. This revised oversight structure is expected to clarify compliance obligations and ensure investor protection in both listed and unlisted markets. The new rules are designed to adapt to the increasing focus on dematerialisation and the substantial influx of unlisted company activity in the Indian capital markets.
To bolster internal controls and prevent fraud such as unauthorised share transfers, share certificate forgery, dividend fraud, and data manipulation, SEBI’s updated regulations introduce robust institutional mechanisms for RTAs. These require the implementation of comprehensive Know Your Customer (KYC) surveillance systems to verify security holders’ identities, in addition to whistle-blower protocols, escalation, and reporting mechanisms. Such frameworks, already established for mutual funds and brokers, are now extended to RTAs to enhance transparency and accountability within the sector.