This means that the entire system of having in-house registrars will come under review. Sebi had supplied this information to Parliament earlier this month, in reply to specific questions on the matter.
A complete inspection of the 30-odd registrar entities countrywide is also on, and the reports of these inspections are expected to throw further light on the manner in which they function.
In its reply dated September 9, Sebi has said it is examining the issue of having an arm's length relationship between the registrars and their clients. This, Sebi has said, follows a recommendation to this effect by an inspection team which went into the functioning of one of the registrars.
The inspection report on Reliance Consultancy Services (RCS), registrars to the Reliance group, had also thrown up some critical issues pertaining to the functioning of the registrars.
Following the inspection and its rather serious findings, Sebi is now considering all the aspects which need to be addressed in the regulations on registrars and share-transfer agents. The regulator is also looking into what action can be taken against RCS, following the slapping of a showcause notice on it.
Sebi has also provided Parliament a full list of 20 top private sector companies, classified according to market capitalisation, and whether their share transfer operations are being handled by an outside firm or conducted in-house.
The list shows an overwhelming trend of big companies getting their share transfer work done in-house, or even by companies close to them. As many as 14 of the top 20 companies get their share transfers done in-house, the list revealed.
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The 14 companies with in-house registries are Hindustan Lever, Reliance Industries, Bajaj Auto, ITC, Larsen& Toubro, Hindalco, Brooke Bond, Grasim, Indian Hotels, Mahaindra and Mahindra, HDFC, Motor Ind, BSES and Ranbaxy.
While Tata Share is the registrar for Telco, Tisco and Tata Chem, Colgate's registar is Sharepro, and Epic Financial is the share-transfer agent of Gujarat Ambuja.
According to senior Sebi officials, though the question of how to enforce the arm's length relationship has not yet been formally decided by Sebi, one option could be to amend the regulations so that the relationship is built into the Sebi registration condition for the registrars. ``We can draw on the merchant banking regulations and decide on the arm's length issue,'' Sebi officials said.