The Registrar Association of India (RAIN) has initiated hectic efforts to expedite the share transfer procedures in the country.
The association is writing to the Bombay Stock Exchange seeking amendments in the listing agreement. It has also set up two committees for streamlining its operations. These are the Service Standards Committee and the Membership Criteria Committee.
The members of the Service Standards Committee, which will lay down guidelines to speed up the share transfer process, are OP Agarwal of Hindustan Lever, Pradeep Mane of Karvy Consultants, A V Varma of Tata Share Registry and Madhavi Laud of Datamatics.
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The Membership Criteria Committee of the association comprises A K Rastogi of Computronics Financial Services, VL Iyer of Lloyds Capital Services, Salim Kazi of Nucleus Share Custodian and K Venkatraman of Computrade Services.
The Chandrasekharan Committee studied in detail problems involved in the existing share transfer mechanism. In their recommendations, they have also suggested some amendments to the listing agreement.
The report says that the listing agreement should provide for the issue of certificates with only mechanical signatures of directors with companys holograms as valid delivery.
The endorsement of transfer with mechanical signature of authorised signatory shall also be treated as valid delivery.
The Registrar Association of India is also suggesting a plan to curtail the presence of fake and forged share certificates.
They have already prepared a database of about 900 companies that have issued duplicate shares. The Chandrasekharan Committee report says that a broker will not deal with an unregistered sub-broker.
The report has also suggested creation of an independent centralised data bank with details of lost shares and duplicate share certificate for instant access by the members of the stock exchanges, clearing house and custodians.
Sebis vision of a centralised database includes a plan for disseminating information that can make this cell a focal point, whereby all the front-end buyers are warned that these shares should not be brought form the market and other intermediaries at all other levels such a clearing house, custodians offices, and registrar offices.
The Chandrasekharan Committee has also studied the problems associated with the endorsement on the share certificate and despatch.
According to the report, the details of the transfer and transferee are manually endorsed on the reverse of the share certificate and signed by one of the authorised signatories of the company. This manual operation is prone to errors.
Of late, the report says, the computer generated endorsement stickers containing transfer details are affixed on the reverse of the certificate along with the signature of the authorised signatory of the company.
In some of the cases, the share transfer agents instead of affixing them, post these stickers to the investors requesting them to affix the same on the certificates. This procedure is also prone to many errors.
The report also adds on to say that the despatch of the certificates after affecting the transfer involves a lot of manual work such as sorting and attaching of the computer generated covering letter to the certificate to be despatched and finally enveloping the same.
Then handing it over to the postal department for delivery to the transferee.
The STAs normally send the documents or securities only by registered post and not by hand delivery. In case of big corporations, there are problems with the despatches that are to be taken on a daily basis.
The postal department have a resource constraint which compels them to put a limit on the number of registered parcels which they can keep in a day.