Securities and Exchange Board of India (Sebi) has issued a new set of instructions on transfer of securities, and asked the depository participants (DPs) - National Securities Depository (NSDL) and Central Securities Depository (CSDL) - to give more emphasis on investor education.Under the new rules, the DPs have been asked to counter check information on transactions with the investor if some unusual features are observed. The move by the market regulator comes after it received complaints from investor forums that securities are transferred from the beneficial owner accounts (BO) without proper authorisation of the concerned investor. The Secondary Market Advisory Committee (SMAC) of Sebi studied the issue and has recommended a few safeguards.The DPs have also been asked to put in place appropriate checks and balances with reverification of signatures of the investors while processing the slips. They would also be cross checking with the investors under exceptional circumstances."The DPs shall mandatory verify with a BO before acting upon the delivery instruction slip (DIS) in case of an account which remained inactive, that is, where no debit transaction had taken place for a continuous period of six months whenever all the ISIN-securities-balances in that account are transferred at a time," Sebi circular issued by V S Sundaresan said. However, in case of active accounts, such verification may be made mandatory only if the BO account has five or more ISINs and all such ISIN balances are transferred at a time. The authorised official of the DP verifying such transactions with the BO shall record the details of the process, date, time, etc of the verification on the instruction slip under his signature.Sebi has asked the depositories to inform the investors that they should not leave blank or signed DIS with the depository participants (DPs). Besides, the DPs should not accept pre-signed blank slips from investors. The new instructions also say that DPs should take optimum care while issuing new slips. "The DPs shall issue only one DIS booklet containing not more than 20 slips for individual account holders and not more than 100 slips for non-individual account holders at a time. If the DIS booklet is lost / stolen / not traceable by the beneficiary owner (BO), the same must be intimated to the DP immediately in writing. On receipt of such intimation, the DP shall cancel the unused DIS of the said booklet," a Sebi release said.
