MASTER CIRCULAR
SEBI/HO/CFD/PoD-1/P/CIR/2024/072
June 03, 2024
To
All registered Bankers to an Issue (‘”BTI”)
Dear Sir / Madam,
Subject: Master Circular for Bankers to an Issue registered with SEBI
1. The Securities and Exchange Board of India (“SEBI” or “the Board”) has
been, from time to time, issuing various circulars/directions to Bankers to an
Issue under the relevant provisions of the Securities and Exchange Board of
India (Bankers to an Issue) Regulations, 1994 and extant securities laws. In
order to enable the stakeholders to have access to all such circulars at one
place, this Master Circular in respect of the Bankers to an Issue is prepared
and issued.
2. With the issuance of this Master Circular, all directions/instructions contained
in the circulars listed out in the Appendix to this Master Circular shall stand
rescinded to the extent they relate to Bankers to an Issue.
3. Notwithstanding such rescission, -
(a) anything done or any action taken or purported to have been done or
taken under the rescinded circulars, prior to such rescission, shall be
deemed to have been done or taken under the corresponding provisions
of this Master Circular;
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(b) any application made to the Board under the rescinded circulars, prior
to such rescission, and pending before it shall be deemed to have been
made under the corresponding provisions of this Master Circular; and
(c) the previous operation of the rescinded circulars or anything duly done
or suffered thereunder, any right, privilege, obligation or liability
acquired, accrued or incurred under the rescinded circulars, any penalty,
incurred in respect of any violation committed against the rescinded
circulars, or any investigation, legal proceeding or remedy in respect of
any such right, privilege, obligation, liability, penalty as aforesaid, shall
remain unaffected as if the rescinded circulars have never been
rescinded.
4. This Master Circular is issued in exercise of the powers conferred under
Section 11(1) of the Securities and Exchange Board of India Act, 1992 (“SEBI
Act”).
5. This Master circular is available at the web page “Master Circulars” on the
website www.sebi.gov.in.
Yours faithfully,
Yogita Jadhav
General Manager
Division of Policy and Development
Corporation Finance Department
Phone + 91-022-26449583
Email: yogitag@sebi.gov.in
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Table of Contents
List of Abbreviations................................................................................ 5
CHAPTER I – REGISTRATION RELATED MATTERS ............................. 6
1. Online Registration Mechanism for BTI .................................................................. 6
2. Transfer of business by SEBI registered intermediaries to other legal entity .......... 6
3. Prior approval for change in control ........................................................................ 7
4. Registration of Non-scheduled Payments Banks as Bankers to an Issue ............. 10
5. Designated e-mail ID for redressal of investor complaints and regulatory
communication with SEBI ..................................................................................... 11
CHAPTER II - GENERAL OBLIGATIONS / RESPONSIBILITIES AND
REPORTING REQUIREMENTS .............................................................. 12
6. Regulatory Compliance and Periodic Reporting ................................................... 12
7. Strengthening the Guidelines and Raising Industry standards for BTI .................. 13
8. Advisory for Financial Sector Organizations regarding Software as a Service (SaaS)
based solutions .................................................................................................... 13
CHAPTER III – OTHER GUIDELINES..................................................... 15
9. Processing of Investor Complaints in SEBI Complaints Redress System (SCORES)
15
10. Mandatory Requirement of Permanent Account Number (PAN) for all transactions
in the securities market ........................................................................................ 15
11. Prevention of circulation of unauthenticated news by SEBI Registered Market
Intermediaries through various modes of communication ..................................... 16
12. Guidelines on Outsourcing of Activities by BTI ..................................................... 17
13. General Guidelines for dealing with conflicts of interest of BTIs and their associated
persons in the Securities Market .......................................................................... 18
14. Reporting requirement under Foreign Accounts Tax Compliance Act (FATCA) .... 20
15. Guidelines on Anti-Money Laundering (AML) Standards and Combating the
Financing of Terrorism (CFT) /Obligations of Securities Market Intermediaries under
the Prevention of Money Laundering Act, 2002 and Rules framed thereunder ..... 21
Annexure 1 - Declaration-Cum-Undertaking ........................................... 22
Annexure 2 - Format for sending the Designated e-mail ID for regulatroy
communication with SEBI ......................................................................... 24
Annexure 3 - Format of Half yearly Report ............................................. 25
Annexure 4 - Provisions with regard to Payment of Dividend / Interest/
Redemption .............................................................................................. 30
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Annexure 5 Advisory For Financial Sector Organisation –RBI and SEBI
…..32
Annexure 6 – Details of Format for Investor Grievance against BTI ...... 34
Annexure 7 – Principles For Outsourcing for BTIs………………………..35
Appendix ................................................................................................. 40
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List of Abbreviations
ASBA Application Supported by Blocked Amount
BTI Bankers to Issue
BTI Regulations Securities and Exchange Board of India (Bankers to an Issue)
Regulations, 1994
CERT-in Indian Computer Emergency Response Team
CFD Corporation Finance Department
DP Depository Participant
GRC Governance, Risk & Compliance
IFSC International Financial Service Centres
Intermediaries Securities and Exchange Board of India (Intermediaries)
Regulations Regulations, 2008
KYC Know Your Client
NCLT National Company Law Tribunal
NOC No Objection Certificate
PAN Permanent Account Number
RBI Reserve Bank of India
RTA Registrar and Transfer Agents
SaaS Software as a Service
SAST Regulations Securities and Exchange Board of India (Substantial Acquisition
of Shares and Takeovers) Regulations, 2011
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CHAPTER I – REGISTRATION RELATED MATTERS
1. Online Registration Mechanism for BTI1
1.1. The SEBI Intermediary Portal is available at https://siportal.sebi.gov.in for
SEBI registered intermediaries including BTI to submit registration
applications online. SEBI Intermediary Portal includes online application for
registration, processing of application, grant of final registration, application
for surrender/cancellation, submission of periodical reports, requests for
change of name/ address/ other details, etc. The link for SEBI Intermediary
Portal is also available on SEBI website – www.sebi.gov.in .
1.2. All applications for registration / surrender / other requests are required to
be made through SEBI Intermediary Portal only. The applicants are
separately required to submit relevant documents viz. declarations /
undertakings required as a part of application forms prescribed in relevant
regulations, in physical form, only for records without impacting the online
processing of applications for registration.
1.3. In case of any queries and clarifications with regard to the SEBI Intermediary
Portal, BTI may contact on 022-26449364 or may write at
portalhelp@sebi.gov.in.
2. Transfer of business by SEBI registered intermediaries to other legal entity2
2.1. In respect of the registration applications pursuant to transfer of business (SEBI
regulated business activity) from one legal entity, which is a SEBI registered
Intermediary (transferor), to other legal entity (transferee), the following is
clarified:
1 SEBI Circular No. SEBI/HO/MIRSD/MIRSD1/CIR/P/2017/38 dated May 02, 2017
2 SEBI Circular No. SEBI/HO/MIRSD/DOR/CIR/P/2021/46 dated March 26, 2021
Page 6 of 42
2.1.1. The transferee shall obtain fresh registration from SEBI in the same
capacity before the transfer of business if it is not registered with SEBI in the
same capacity. SEBI shall issue new registration number to transferee
different from transferor’s registration number in the following scenario:
“Business is transferred through regulatory process (pursuant to merger/
amalgamation / corporate restructuring by way of order of primary regulator
/govt. / NCLT, etc.) or non-regulatory process (as per private agreement
/MOU pursuant to commercial dealing / private arrangement) irrespective of
transferor continues to exist or ceases to exist after the said transfer.”
2.2. In case of change in control pursuant to both regulatory process and non-
regulatory process, prior approval and fresh registration shall be obtained. While
granting fresh registration to the same legal entity pursuant to change in control,
same registration number shall be retained.
2.3. If the transferor ceases to exist, its certificate of registration shall be surrendered.
2.4. In case of complete transfer of business by transferor, it shall surrender its
certificate of registration.
2.5. In case of partial transfer of business by transferor, it can continue to hold its
certificate of registration.
3. Prior approval for change in control3
3.1. To streamline the process of providing approval to the proposed change in
control of BTIs, the following procedure has been specified:
3.1.1. BTIs shall make an online application to SEBI for prior approval through
the SEBI Intermediary Portal (‘SI Portal’) (https://siportal.sebi.gov.in).
3.1.2. The online application in SI portal shall be accompanied by the following
information / declaration / undertaking about itself, the acquirer(s) / the
3SEBI Circular no. SEBI/HO/CFD/PoD-2/P/CIR/2023/141 dated August 10, 2023
Page 7 of 42
person(s) who shall have the control and the directors / partners of the
acquirer(s) / the person(s) who shall have the control:
a) Current and proposed shareholding pattern of the applicant
b) Whether any application was made in the past to SEBI seeking registration
in any capacity but was not granted? If yes, details thereof.
c) Whether any action has been initiated / taken under Securities Contracts
(Regulation) Act, 1956 / the SEBI Act or rules and regulations made
thereunder? If yes, the status thereof along with the corrective action taken
to avoid such violations in the future. The acquirer/ the person who shall
have the control shall also confirm that it shall honour all past liabilities /
obligations of the applicant, if any.
d) Whether any investor complaint is pending? If yes, steps taken and
confirmation that the acquirer/ the person who shall have the control shall
resolve the same.
e) Details of litigation(s), if any.
f) Confirmation that all the fees due to SEBI have been paid.
g) Declaration cum undertaking of the BTI and the acquirer(s)/ the person(s)
who shall have the control (in a format enclosed at Annexure 1), duly
stamped and signed by their authorized signatories that:
i. there will not be any change in the Board of Directors of the incumbent,
till the time prior approval is granted;
ii. pursuant to grant of prior approval by SEBI, the incumbent shall inform
all the existing investors/ clients about the proposed change prior to
effecting the same, in order to enable them to take informed decision
regarding their continuance or otherwise with the new management; and
iii. the ‘fit and proper person’ criteria as specified in Schedule II of the
Intermediaries Regulations are complied with.
h) In case the incumbent is a registered stock broker, clearing member,
depository participant, in addition to the above, it shall obtain approval /
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NOC from all the stock exchanges / clearing corporations / depositories,
where the incumbent is a member / depository participant and submit self-
attested copy of the same to SEBI.
3.1.3. Subject to appropriate other sectoral regulator’s approval with regard to
change in control, the prior approval granted by SEBI shall be valid for a
period of six months from the date of SEBI’s approval within which the
applicant shall file application for fresh registration pursuant to change in
control.
3.2. To streamline the process of providing approval to the proposed change in
control of BTI in matters which involve scheme(s) of arrangement which needs
sanction of the NCLT in terms of the provisions of the Companies Act, 2013, the
following has been decided:
3.2.1. The application seeking approval for the proposed change in control of
the BTI shall be filed with SEBI prior to filing the application with NCLT.
3.2.2. Upon being satisfied with compliance of the applicable regulatory
requirements, an in-principle approval will be granted by SEBI;
3.2.3. The validity of such in-principle approval shall be three months from the
date issuance, within which the relevant application shall be made to
NCLT.
3.2.4. Within 15 days from the date of order of NCLT, BTI shall submit an online
application in terms of para 3.1 of this Master Circular along with the
following documents to SEBI for final approval:
a. Copy of the NCLT Order approving the scheme;
b. Copy of the approved scheme;
c. Statement explaining modifications, if any, in the approved scheme
vis-à-vis the draft scheme and the reasons for the same; and
d. Details of compliance with the conditions/ observations, if any,
mentioned in the in-principle approval provided by SEBI.
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3.3. Transfer of shareholdings among immediate relatives and transmission of
shareholdings and their effect on change in control4
3.3.1. Transfer /transmission of shareholding in case of unlisted body corporate
BTI: In the following scenarios, change in shareholding of the BTI will not
be construed as change in control:
a) Transfer of shareholding among immediate relatives shall not result into
change in control. Immediate relative shall be construed as defined under
Regulation 2(l) of the SAST Regulations which inter-alia includes any
spouse of that person, or any parent, brother, sister or child of the person
or of the spouse;
b) Transfer of shareholding by way of transmission to immediate relative or
not, shall not result into change in control.
3.3.2. Incoming entities/ shareholders becoming part of controlling interest in the
BTI pursuant to transfer of shares from immediate relative / transmission
of shares (immediate relative or not), need to satisfy the fit and proper
person criteria stipulated in Schedule II of the Intermediaries Regulations.
4. Registration of Non-scheduled Payments Banks as Bankers to an Issue5
4.1. Non-scheduled Payments Banks, which have prior approval from Reserve Bank
of India, shall be eligible to act as a BTI subject to fulfilment of the conditions as
stipulated in the BTI Regulations.
4.2. Payments Banks registered as a BTI shall also be permitted to act as a Self-
Certified Syndicate Bank subject to the fulfilment of the criteria laid down by SEBI
in this regard from time to time. The blocking / movement of funds from the
investor to issuer shall only be made through the savings account of the investor
held with the payments bank.
4 SEBI Circular no. SEBI/HO/MIRSD/DOR/CIR/P/2021/42 dated March 25, 2021
5 SEBI Circular no. SEBI/HO/MIRSD/MIRSD_DOR/P/CIR/ 605 / 2021 dated August 03, 2021
Page 10 of 42
5. Designated e-mail ID for redressal of investor complaints and
regulatory communication with SEBI6
5.1. BTIs shall designate e-mail IDs for (i) registration and redressal of investor
complaints and (ii) regulatory communication with SEBI and shall inform to SEBI
at bti@sebi.gov.in as per the format prescribed at Annexure 2.
5.2. The aforesaid e-mail IDs shall be exclusively used for the above purposes and
shall not be a person-centric e-mail ID.
5.3. All registered BTI shall display the email ID and other relevant details prominently
on their websites and in the various materials/pamphlets/advertisement
campaigns initiated by them for creating investor awareness.
6 SEBI Circular No. MIRSD/DPS III/Cir-01/07 dated January 22, 2007 and SEBI Circular no. MIRSD/
DPSIII/ Cir-21/ 08 dated July 07, 2008
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CHAPTER II - GENERAL OBLIGATIONS / RESPONSIBILITIES AND
REPORTING REQUIREMENTS
6. Regulatory Compliance and Periodic Reporting7
6.1. The BTIs are required to submit half-yearly reports to SEBI in electronic form only
by e-mail within three months from the expiry of the half year. The format of the
report is specified in Annexure 3.
6.2. The Board of Directors of BTIs shall review the half-yearly reports and record its
observations on (i) the deficiencies and non-compliances; and (ii) corrective
measures initiated to avoid such instances in future.
6.3. The compliance officer of BTI shall send the report in excel format to SEBI at
bti@sebi.gov.in on half-yearly basis within three months from the expiry of the
half year.
6.4. The excel files containing the half-yearly report is required to be sent to email ID
bti@sebi.gov.in with the subject/title “Half-yearly report submitted by AAA for the
half-year ended XXX YYYY” where AAA represents the name of the BTI, XXX
represents the month at the end of the half-year and YYYY represents the year.
Also, the attached excel file containing the half yearly report shall bear the name
of the BTI, the periodicity of the report as well as the month at the end of the half-
year and the corresponding year. For example, if a BTI ABC Limited submits the
report for the half year ended September, 2008, the report submitted to
bti@sebi.gov.in shall bear the subject/title - “Half-yearly report submitted by ABC
Limited for the half-year ended September 2008” and the attached excel file shall
bear the name “ABCLimitedhalfyearlySeptember2008”.
7 SEBI Circular no. CIR/MIRSD/4/2012 dated March 29, 2012; SEBI Circular no. MIRSD/DPS-2/BTI/Cir-
15/2008 dated May 06, 2008; SEBI Circular no. BTI Circular no. 3 (1999-2000) dated July 09, 1999 and
SEBI Circular no. RBTI ( G I Series) Circular no. 1 (95-96) dated April 21, 1995
Page 12 of 42
6.5. BTIs shall also report the following change(s) to SEBI in the half-yearly reports:8
a. Amalgamation, demerger, consolidation or any other kind of corporate
restructuring falling within the scope of section 230 of the Companies Act, 2013
or the corresponding provision of any other law for the time being in force;
b. Change in Director, including managing director/ whole-time director;
c. Change in shareholding not resulting in change in control.
7. Strengthening the Guidelines and Raising Industry standards for BTI9
7.1. BTIs, shall strictly comply with guidelines placed at Annexure 4 to the extant
relevant to them.
7.2. The guidelines annexed to this master circular cover the following broad areas:
7.2.1. Provisions with respect to Payment of Dividend / interest / redemption
7.2.2. Provisions with respect to Transfer / Transmission / Correction of errors
etc.
7.3. The records /documents described in Annexure 4 shall be maintained for period
not less than eight years after completion of the relevant transactions by BTIs.
7.4. BTIs can put in place more stringent internal checks and controls if they so desire.
8. Advisory for Financial Sector Organizations regarding Software as a Service
(SaaS) based solutions10
8.1. Ministry of Electronics & Information Technology, Govt. of India (MoE&IT), had
informed SEBI that the financial sector institutions avails or may avail Software
as a Service (SaaS) based solution for managing their Governance, Risk &
Compliance (GRC) functions so as to improve their cyber Security Posture. As
observed by MoE&IT, though SaaS may provide ease of doing business and
quick turnaround, but it may bring significant risk to health of financial sector as
many a time risk and compliance data of the institution moves beyond the legal
and jurisdictional boundary of India due to nature of shared cloud SaaS,
thereby posing risk to the data safety and security.
8 SEBI Circular no. CIR/MIRSD/11/2011 dated June 20, 2011
9 SEBI Circular no. SEBI/HO/MIRSD/DOP1/CIR/P/2018/73 dated April 20, 2018
10 SEBI Circular no. SEBI/HO/MIRSD2/DOR/CIR/P/2020/221 dated November 03, 2020
Page 13 of 42
8.2. In this regard, Indian Computer Emergency Response Team (CERT-in) had
issued an advisory for Financial Sector organizations. The advisory had been
forwarded to SEBI for bringing the same to the notice of financial sector
organization. The advisory is enclosed at Annexure 5.
8.3. BTIs are advised to ensure complete protection and seamless control over the
critical systems at their organizations by continuous monitoring through direct
control and supervision protocol mechanisms while keeping the critical data
within the legal boundary of India.
8.4. The compliance of the advisory shall be reported in the half-yearly report to
SEBI with an undertaking stating the following, “Compliance of the SEBI
circular for Advisory for Financial Sector Organizations regarding Software as
a Service (SaaS) based solutions has been made.”
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CHAPTER III – OTHER GUIDELINES
9. Processing of Investor Complaints in SEBI Complaints Redress System
(SCORES)11
9.1. SEBI has launched a centralized web based complaints redress system
‘SCORES’ in June 2011.
9.2. BTIs shall comply with the requirements laid down vide Master Circular No.
SEBI/HO/OIAE/IGRD/CIR/P/2023/156 dated September 20, 2023, as applicable
and as amended from time to time.
9.3. As an additional measure and for information of all investors who deal/ invest/
transact in the market, the offices of BTI shall display information as provided in
Annexure 6.
10. Mandatory Requirement of Permanent Account Number (PAN) for all
transactions in the securities market12
10.1. In order to strengthen the Know Your Client (KYC) norms and identify every
participant in the securities market, PAN shall be the sole identification number
for all participants transacting in the securities market irrespective of the
amount of transaction, thereby ensuring sound audit trail of all the
transactions.
10.2. In this regard, the BTIs shall -
10.2.1. put in the necessary systems in place so that all the individual databases
of their clients and clients’ transactions are linked to the PAN details of
the client with which analysis can be made.
10.2.2. build the necessary infrastructure for enabling accessibility and query
based on PAN thereby enabling retrieval of all the details of the clients
that is available including transactions done by them.
10.2.3. collect copies of PAN cards issued to their clients by the Income Tax
Department and maintain the same in their record after verifying with the
11 SEBI Circular no. CIR/MIRSD/3/2014 dated August 28, 2014
12 SEBI Circular no. MRD/DoP/Cir- 05/2007 dated April 27, 2007 and SEBI Circular no. MRD/DoP/Cir-
20/2008 dated June 30, 2008
Page 15 of 42
original.
10.2.4. cross-check the aforesaid details collected from their clients with the
details on the website (link is given below) of the Income Tax Department.
( https://www.incometaxmumbai.gov.in/pan/online-pan-verification/ )
10.3. PAN may not be insisted in the case of Central Government, State
Government, and the officials appointed by the courts e.g. Official liquidator,
Court receiver etc. (under the category of Government) for transacting in
securities market.
10.4. However, the aforementioned clarification would be subject to the BTIs
verifying the veracity of the claim of the specified organizations, by collecting
sufficient documentary evidence in support of their claim for such an
exemption.
11. Prevention of circulation of unauthenticated news by SEBI Registered Market
Intermediaries through various modes of communication13
11.1. As market rumours can do considerable damage to the normal functioning and
behavior of the market and distort price recovery mechanisms, the BTIs are
directed that:
11.1.1. Proper internal code of conduct and controls should be put in place.
11.1.2. Employees/temporary staff/voluntary workers etc. employed/working in the
Offices of BTIs do not encourage or circulate rumours or unverified
information obtained from client, industry, any trade or any other sources
without verification.
11.1.3. Access to Blogs / Chat forums / Messenger sites etc. should either be
restricted under supervision or access should not be allowed.
11.1.4. Logs for any usage of such Blogs/Chat forums/Messenger sites (called
by any nomenclature) shall be treated as records and the same should
13 SEBI Circular no. Cir/ ISD/1/2011 dated March 23, 2011; and SEBI Circular no. Cir/ISD/2/2011 dated
March 24, 2011
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be maintained as specified by the respective Regulations which govern
the BTIs.
11.1.5. Employees should be directed that any market related news received by
them either in their official mail/personal mail/blog or in any other manner,
should be forwarded only after the same has been seen and approved by
the Compliance Officer of the BTI. If an employee fails to do so, he/she
shall be deemed to have violated the various provisions contained in the
SEBI Act / Rules / Regulations etc. and shall be liable for action. The
Compliance Officer shall also be held liable for breach of duty in this
regard.
12. Guidelines on Outsourcing of Activities by BTI14
12.1. SEBI Regulations for BTIs require that they shall render at all times high
standards of service and exercise due diligence and ensure proper care in
their operations.
12.2. It has been observed that often the BTIs resort to outsourcing with a view to
reduce costs, and at times, for strategic reasons.
12.3. Outsourcing may be defined as the use of one or more than one third party –
either within or outside the group by a BTI to perform the activities associated
with services which the BTI offers.
12.4. Principles for Outsourcing - The risks associated with outsourcing may be
operational risk, reputational risk, legal risk, country risk, strategic risk, exit-
strategy risk, counter party risk, concentration and systemic risk. The
principles for outsourcing are given at Annexure 7 which shall be followed by
BTIs.
12.5. Activities that are not to be Outsourced - The BTIs desirous of outsourcing
their activities shall not, however, outsource their core business activities and
compliance functions. In respect of Know Your Client (KYC) requirements, the
14 SEBI Circular no. CIR/MIRSD/24/2011 dated December 15, 2011
Page 17 of 42
BTIs are required to comply with the provisions of Securities and Exchange
Board of India {KYC (Know Your Client) Registration Agency} Regulations,
2011 and Guidelines issued thereunder from time to time.
12.6. Reporting to Financial Intelligence Unit (FIU) - The BTIs are responsible for
reporting of any suspicious transactions / reports to FIU or any other
competent authority in respect of activities carried out by the third parties.
13. General Guidelines for dealing with conflicts of interest of BTIs and their
associated persons in the Securities Market 15
13.1. BTIs and their associated persons shall abide by the following guidelines for
avoidance of conflict of interest and they shall be responsible for educating
their associated persons for compliance of these guidelines:
13.1.1. lay down, with active involvement of senior management, policies and
internal procedures to identify and avoid or to deal or manage actual or
potential conflict of interest, develop an internal code of conduct
governing operations and formulate standards of appropriate conduct in
the performance of their activities, and ensure to communicate such
policies, procedures and code to all concerned;
13.1.2. at all times maintain high standards of integrity in the conduct of their
business;
13.1.3. ensure fair treatment of their clients and not discriminate amongst them;
13.1.4. ensure that their personal interest does not, at any time conflict with their
duty to their clients and client’s interest always takes primacy in their
advice, investment decisions and transactions;
13.1.5. make appropriate disclosure to the clients of possible source or potential
areas of conflict of interest which would impair their ability to render fair,
objective and unbiased services;
15 SEBI Circular no. CIR/MIRSD/5/2013 dated August 27, 2013
Page 18 of 42
13.1.6. endeavor to reduce opportunities for conflict through prescriptive
measures such as through information barriers to block or hinder the flow
of information from one department/ unit to another, etc.;
13.1.7. place appropriate restrictions on transactions in securities while handling
a mandate of issuer or client in respect of such security so as to avoid any
conflict;
13.1.8. not deal in securities while in possession of material non published
information;
13.1.9. not to communicate the material non published information while dealing
in securities on behalf of others;
13.1.10. not in any way contribute to manipulate the demand for or supply of
securities in the market or to influence prices of securities;
13.1.11. not have an incentive structure that encourages sale of products not
suiting the risk profile of their clients;
13.1.12. not share information received from clients or pertaining to them,
obtained as a result of their dealings, for their personal interest;
13.2. For the purpose of above guidelines "associated persons" shall have the same
meaning as defined in the Securities and Exchange Board of India
(Certification of Associated Persons in the Securities Markets) Regulations,
2007.
13.3. The Boards of BTIs shall put in place systems for implementation of
aforementioned provisions and provide necessary guidance enabling
identification, elimination or management of conflict of interest situations and
shall periodically review the compliance of the aforesaid guidelines.
Page 19 of 42
14. Reporting requirement under Foreign Accounts Tax Compliance Act
(FATCA)16
14.1. India joined the Multilateral Competent Authority Agreement (MCAA) on
Automatic Exchange of Financial Account Information on June 3, 2015. In
terms of the MCAA, all countries which are a signatory to the MCAA, are
obliged to exchange a wide range of financial information after collecting the
same from financial institutions in their country/jurisdiction.
14.2. Further, on July 9, 2015, the Governments of India and United States of
America (USA) have signed an agreement to improve international tax
compliance and to implement the Foreign Account Tax Compliance Act
(FATCA) in India. The USA has enacted FATCA in 2010 to obtain information
on accounts held by U.S. taxpayers in other countries. As per the aforesaid
agreement, foreign financial institutions (FFls) in India will be required to report
tax information about U.S. account holders/taxpayers directly to the Indian
Government which will, in turn, relay that information to the U.S. Internal
Revenue Service (IRS).
14.3. For implementation of the MCAA and agreement with USA, the Government
of India has made necessary legislative changes to Section 285BA of the
Income-tax Act, 1961. Further, the Government of India has notified Rules
114F to 114H under the Income Tax Rules, 1962 and form No. 61B for
furnishing of statement of reportable account as specified in the Rules.
14.4. The “Guidance Note on implementation of Reporting Requirements under
Rules 114F to 114H of the Income Tax Rules” as issued by the Department of
Revenue, Ministry of Finance vide F.No.500/137/2011-FTTR-III dated August
31, 2015 is available at
http://www.incometaxindia.gov.in/communications/notification/guidance_note
s_on_implementation_31_08_2015.pdf. and
https://incometaxindia.gov.in/Documents/exchange-of-information/LETTER-F-
NO-500-137-2011%20_1_.pdf
14.5. BTIs are advised to take necessary steps to ensure compliance with the
requirements specified in the aforesaid Rules after carrying out necessary due
diligence.
16 SEBI Circular CIR/MIRSD/2/2015 dated August 26, 2015 and SEBI Circular CIR/MIRSD/3/2015 dated
September 10, 2015
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15. Guidelines on Anti-Money Laundering (AML) Standards and Combating the
Financing of Terrorism (CFT) /Obligations of Securities Market Intermediaries
under the Prevention of Money Laundering Act, 2002 and Rules framed
thereunder17
BTIs are advised to refer to SEBI Master Circular bearing reference no.
SEBI/HO/MIRSD/MIRSD-SEC-5/P/CIR/2023/022 issued on February 03, 2023 with
respect to ‘Guidelines on Anti-Money Laundering (AML) Standards and Combating
the Financing of Terrorism (CFT) /Obligations of Securities Market Intermediaries
under the Prevention of Money Laundering Act, 2002 and Rules framed there
under’. The said Master Circular can also be accessed at the following link:
https://www.sebi.gov.in/legal/master-circulars/feb-2023/guidelines-on-anti-money-
laundering-aml-standards-and-combating-the-financing-of-terrorism-cft-
obligations-of-securities-market-intermediaries-under-the-prevention-of-money-
laundering-act-2002-a-_67833.html
17 SEBI Circular no. SEBI/HO/MIRSD/MIRSD-SEC-5/P/CIR/2023/022 dated February 03, 2023
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Annexure 1
Declaration-Cum-Undertaking
We M/s. (Name of the intermediary / the acquirer(s) / person(s) who shall have the control), hereby
declare and undertake the following with respect to the application for prior approval for change in
control of (name of the intermediary along with the SEBI registration no.):
1. The intermediary (Name) and its principal officer, the directors or managing partners, the
compliance officer and the key management persons and the promoters or persons holding
controlling interest or persons exercising control over the applicant, directly or indirectly (in
case of an unlisted applicant or intermediary, any person holding twenty percent or more voting
rights, irrespective of whether they hold controlling interest or exercise control, shall be
required to fulfill the ‘fit and proper person’ criteria) are fit and proper person in terms of
Schedule II of Securities and Exchange Board of India (Intermediaries) Regulations, 2008.
2. We bear integrity, honesty, ethical behaviour, reputation, fairness and character.
3. We do not incur following disqualifications mentioned in Clause 3(b) of Schedule II of
Securities and Exchange Board of India (Intermediaries) Regulations, 2008 i.e.
i. No criminal complaint or information under section 154 of the Code of Criminal Procedure,
1973 (2 of 1974) has been filed against us by the Board and which is pending.
ii. No charge sheet has been filed against us by any enforcement agency in matters
concerning economic offences and is pending.
iii. No order of restraint, prohibition or debarment has been passed against us by the Board
or any other regulatory authority or enforcement agency in any matter concerning
securities laws or financial markets and such order is in force.
iv. No recovery proceedings have been initiated by the Board against us and are pending.
v. No order of conviction has been passed against us by a court for any offence involving
moral turpitude.
vi. No winding up proceedings have been initiated or an order for winding up has been passed
against us.
vii. We have not been declared insolvent.
viii. We have not been found to be of unsound mind by a court of competent jurisdiction and
no such finding is in force.
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ix. We have not been categorized as a wilful defaulter.
x. We have not been declared a fugitive economic offender.
4. We have not been declared as not ‘fit and proper person’ by an order of the Board.
5. No notice to show cause has been issued for proceedings under Securities and Exchange
Board of India (Intermediaries) Regulations, 2008 or under section 11(4) or section 11B of the
SEBI Act during last one year against us.
6. It is hereby declared that we and each of our promoters, directors, principal officer, compliance
officer and key managerial persons are not associated with vanishing companies.
7. We hereby undertake that there will not be any change in the Board of Directors of incumbent,
till the time prior approval is granted.
8. We hereby undertake that pursuant to grant of prior approval by SEBI, the incumbent shall
inform all the existing investors/ clients about the proposed change prior to effecting the same,
in order to enable them to take informed decision regarding their continuance or otherwise
with the new management.
The said information is true to our knowledge.
(stamped and signed by the Authorised Signatories)
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Annexure 2
Format for sending the Designated e-mail ID for regulatory communication with SEBI
1. The file should be an excel file.
2. The name of the file and the subject of the email shall specify the type of intermediary
and the name of the intermediary. For example – “Bankers to an Issue – XUZ co. Ltd.”
3. The file shall contain the following details:
Name Address Category Registration No Designated Name of
e-mail id compliance
officer
4. The file shall be e-mailed to bti@sebi.gov.in.
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Annexure 3
SECTION I (Activity Report)
REPORT OF BANKER TO AN ISSUE (BTI) FOR THE HALF YEAR ENDED
MARCH/SEPTEMBER, 20..
NAME:
REGISTRATION NO:
DATE OF REGISTRATION (in dd/mm/yy):
Number of branches authorized to act as Collecting Branches
SECTION I: ACTIVITIES
A. Details of activity as Collecting Banker / Self Certified Syndicate Bank / Refund
Banker / Paying Banker for Public Issues
Type No. of issues handled Cumulative Size (in ` crores) of Cumulative
during the half year no. of issues handled during Size (in `
ended March / Sep 20- issues the half year ended crores) of
- managed March / Sep 20-- issues
up to the handled up
half year to the half
ended year ended
March / March / Sep
Sep 20--
Equity Debt Total Equity Debt Total
(listed) (listed)
Collecting Banker
Self Certified
Syndicate
Bank
Refund Banker
Paying Banker
(Dividend/Interest)
Name of Compliance Officer
Email ID
Page 25 of 42
(Name of the Bankers to an Issue)
SECTION II (Redressal of Investor Grievances)
For the Half-year ended March/September, 20..
A. Status of Investor Grievances
Name of the No. of No. of No. of No of complaints pending at
Company complaints complaints complaints the end of half year
pending at received resolved
the end of during the during the
the last half half year half year
year
B. Details of the complaints pending for more than 30 days
Name of the No. of Nature of Steps Status of the complaint (if
Company complaints complaint(s)* Taken for redressed, date of redressal)
pending for redressal
more than 30
days
Name of compliance officer:
Email ID:
*Nature of complaint(s):
1. Deficiencies in handing application forms / payment instrument(s)
2. Deficiencies in capturing data of applicants
3. Deficiency in blocking /unblocking of bank accounts
4. System failures (for ex regarding electronic ASBA applications)
5. Any other
Page 26 of 42
(Name of the Banker to an Issue)
SECTION III – COMPLIANCE
COMPLIANCE CERTIFICATE FOR THE HALF YEAR ENDED MARCH/ SEPTEMBER, 20..
A. No conflict of interest with other activities
The activities other than bankers to an issue performed by BTI are not in conflict with BTI
activities and appropriate systems and policies have been put in place to protect the
interests of investors.
B. Change in status or constitution
i. BTI shall require the taking prior approval from SEBI for change in control and
reporting the following change to SEBI in the half-yearly reports submitted in
accordance with the SEBI.
a) Amalgamation, demerger, consolidation or any other kind of corporate
restructuring falling within the scope of section 230 of the Companies Act, 2013
or the corresponding provision of any other law for the time being in force.
b) Change in Director, including managing director/whole-time director
c) Change in shareholding not resulting in change in control
ii. If there is no change during the relevant quarter, it shall be indicated in the report.
C. Other Information
i. Details of arrest/ conviction of key officials of BTI
ii. Details of prosecution cases or criminal complaints filed by investors against the
BTI
iii. Details of any fraudulent activity by the employees associated with BTI activities
and action taken by the BTI
iv. Details of any disciplinary action taken/ penalty imposed by SEBI/ other
regulatory authority.
v. Action taken by the BTI on the above issues
D. Compliance with Registration Requirements
i. Certified that the requirements specified for SEBI registration as BTI i.e.,
necessary infrastructure, communication and data processing facilities and
manpower to effectively discharge its activities are fulfilled
ii. Certified that the BTI or any of its directors is not involved in any litigation
connected with the securities market which has an adverse bearing on the
business as BTI or has not been convicted of any economic offence.
E. Flow of applications
i. Certified that the requirements prescribed from time to time with respect to the
ASBA are fulfilled except for those mentioned below:
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a) Issue wise instances of delay in forwarding information to the Registrar to an Issue
(beyond the period prescribed from time to time)
S. No Issuer Number of days of delay in forwarding information on
ASBA applications uploaded & amount blocked
(Currently time line is T+2)
b) Issue wise instances of delay in forwarding application forms to registrar (beyond
the period prescribed from time to time)
S. No Issuer Number of Number of application Range of delay
application forms forwarded to (min and max
forms received Registrar with delay no., of days)
c) Issue wise instances of delay in unblocking the bank accounts under ASBA
(beyond the period prescribed from time to time)
S. No Issuer Number of Number of instances Range of delay
ASBA of delay (min and max
applications no., of days)
received
d) In respect of the following accounts, outstanding balance (in Rupees)
i. Refund
ii. Dividend
iii. Interest
e) Issue wise details of transfer of funds to Investor Education and Protection Fund
(As per Section 125 of Companies Act, 2013)
f) Details of deficiencies and non-compliances (in addition to those mentioned at 'E'
above.
g) Details of the review of the report by the Board of Directors
Date of Board Review (dd/mm/yyyy)
Observation of the Board on
i. Deficiencies and non compliances mentioned at E & F
ii. Corrective measures initiated to avoid such instances in future
Certified that we have complied with Securities and Exchange Board of India (Bankers to an
Issue) Regulations, 1994, applicable provisions of Securities and Exchange Board of India (Issue
of Capital and Disclosure Requirements) Regulations, 2018, Circulars issued by SEBI and any
Page 28 of 42
other laws applicable from time to time except the deficiencies and non-compliances those
specifically reported at 'E' and 'F' above.
Name of Compliance Officer
Email ID
Page 29 of 42
Annexure 4
I. Provisions with regard to Payment of Dividend / Interest / Redemption:
1. The dividend / interest / redemption processing Bank shall ensure that the Dividend /
Interest / redemption Master file (i.e. file containing detailed list of beneficiaries entitled
for dividend / interest / redemption distribution by whatever name called on the record
date) shall include Company Name, Folio No., DPID/Client ID, Name of the first
securities holder, Dividend / interest / redemption payment date, Dividend / interest /
redemption amount, Payee details, Bank name, Bank account, Bank branch of the
holder of securities, MICR number, Dividend / Interest / Redemption Warrant
number, details of payment made through electronic channels such as RTGS/NEFT.
The said file shall be shared with the Banker through a secured process/procedure as
per Banker's prescribed secured mechanism. Copy of the Dividend / Interest /
Redemption Master data file containing details for each dividend / interest / redemption
paid shall be maintained by the bank and the same shall be reconciled by the RTA and
the Issuer Company.
2. In cases where bank account details of the securities holder is not available with RTA
or there is change in bank account details, RTA shall obtain account details along with
cancelled cheque to update the securities holder's data. The original cancelled cheque
shall bear the name of the securities holder failing which securities holder shall submit
copy of bank passbook /statement attested by the bank. RTA shall then update the
bank details in its records after due verification. The unpaid dividend shall be paid via
electronic bank transfer. In cases where either the bank details such as MICR
(Magnetic Ink Character Recognition), IFSC (Indian Financial System Code), etc. that
are required for making electronic payment are not available or the electronic payment
instructions have failed or have been rejected by the bank, the issuer companies or
their RTA may ask the banker to make payment though physical instrument such as
banker's cheque or demand draft to such securities holder incorporating his bank
account details.
3. The dividend / interest / redemption processing Bank shall ensure that any dividend /
interest / redemption instrument (such as demand drafts dividend / interest /
redemption warrants etc.) lying unpaid beyond the validity period of the instrument
shall be cancelled and the dividend / interest / redemption amount transferred earlier
by issuer in the said account shall be credited back immediately to the relevant bank
account of the Issuer Company. Banks should also provide the unpaid instrument
details when reconciliation data is shared with Issuer Company / RTAs.
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4. the dividend / interest / redemption processing Bank shall ensure that the Banks
provide reconciliation of the Paid and Unpaid details (including bank Transaction
Reference Number, payee name etc.) of the Dividend / interest / redemption paid
fortnightly during the initial validity of the instrument and after the expiry of validity
period of the instrument, quarterly till transfer of funds to Investor Education and
Protection Fund (hereinafter referred to as IEPF). Dividend / interest / redemption
reconciliation data sent by banks to RTA / Issuer Companies shall contain details of all
DDs / new instruments issued / electronic instructions sent in lieu of original dividend /
interest / redemption payment. Details of old as well as new dividend instruments shall
be provided. RTA shall also do the reconciliation and inform the Bankers / Issuer
Companies in case of any discrepancies. The reconciliation files sent by the Banker
shall be maintained by all the three entities, RTA, the Issuer Company, and the
dividend / interest / redemption payment processing Banker as its record for a period
of eight years.
5. Details of the rejection of electronic remittance, dividend / interest / redemption
instruments undelivered, dividend / interest / redemption instruments expired and
subsequent payment of dividend / interest / redemption made through new instruments
including the status of payment of the same shall be linked to dividend / interest /
redemption payment record of each of the specific folios by RTA and audit trail shall
be kept in the system of the RTA.
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Annexure 5
CERT-Fin Advisory- 201155100308
Advisory for Financial Sector Organisations- RBI and SEBI
Overview
It has been learnt that some of the financial sector institutions are availing or thinking of availing
Software as a Service (SaaS) based solution for managing their Governance, Risk &
compliance (GRC) functions so as to improve their cyber security posture. Many a time the
risk & compliance data of the institution moves cross border beyond the legal and jurisdictional
boundary of India due to the nature of shared cloud SaaS. While SaaS may provide ease of
doing business and quick turnaround, it also brings significant risk to the overall health of India's
financial sector with respect to data safety and security.
Description
If the following data sets fall in the hands of an adversary/cyber attacker, it may lead to
unprecedented increase in the attack surface area and weakening of Indian financial sector
infrastructure's overall resilience.
• Credit Risk Data
• Liquidity Risk Data
• Market Risk Data
• System & Sub-System Information
• Internal & Partner IP Schema
• Network Topography & Design
• Audit/Internal Audit Data
• System Configuration Data
• System Vulnerability Information
• Risk Exception Information
• Supplier Information & its dependencies related Data
Page 32 of 42
Solution
The Financial Sector organisations may be advised to protect such critical data using layered
defence approach and seamless protection against external or insider threat. The organisations
may also be advised to ensure complete protection & seamless control over their critical system
by continuous monitoring through direct control and supervision protocol mechanisms while
keeping such critical data within the legal boundary of India.
The organisations may also be requested to report back to their respective regulatory authority
regarding compliance to this advisory.
It is requested that you may kindly keep CERT-In informed of the actions taken and periodically
provide the updated compliance to this advisory.
(It may be noted that TLP Amber means: limited disclosure, restricted to participants'
organizations.
When should be used: Sources may use TLP:AMBER when information requires support to be
effectively acted upon, yet carries risks to privacy, reputation, or operations if shared outside
of the organizations involved.
How may it be shared: Recipients may only share TLP:AMBER information with members of
their own organization, and with clients or customers who need to know the information to
protect themselves or prevent further harm. Sources are at liberty to specify additional intended
limits of the sharing: these must be adhered to.)
Page 33 of 42
Annexure 6
For Bankers to an Issue
Dear Investor,
In case of any grievance/complaint against the Bankers to an Issue:
 Please contact Compliance Officer of the Bankers to an Issue (Name and
Address)/ email-id (xxx.@email.com) and Phone No. -91-XXXXXXXXXX.
 You may also approach CEO / email-id(xxx.email.com) and Phone No.- 91-
XXXXXXXXXX
 If not satisfied with the response of the Bankers to an Issue you can lodge your
grievances with SEBI at http://scores.gov.in or you may also write to any of the
offices of SEBI. For any queries, feedback or assistance, please contact SEBI Office
on Toll Free Helpline at 1800227575/ 18002667575.
Page 34 of 42
Annexure 7
PRINCIPLES FOR OUTSOURCING FOR BTIs
1. A BTI seeking to outsource activities shall have in place a comprehensive policy to
guide the assessment of whether and how those activities can be appropriately
outsourced. The Board (as the case may be) {hereinafter referred to as the "the Board"}
of the BTI shall have the responsibility for the outsourcing policy and related overall
responsibility for activities undertaken under that policy.
1.1. The policy shall cover activities or the nature of activities that can be outsourced, the
authorities who can approve outsourcing of such activities, and the selection of third party
to whom it can be outsourced. For example, an activity shall not be outsourced if it would
impair the supervisory authority's right to assess, or its ability to supervise the business
of the BTI. The policy shall be based on an evaluation of risk concentrations, limits on
the acceptable overall level of outsourced activities, risks arising from outsourcing
multiple activities to the same entity, etc.
1.2. The Board shall mandate a regular review of outsourcing policy for such activities in the
wake of changing business environment. It shall also have overall responsibility for
ensuring that all ongoing outsourcing decisions taken by the BTI and the activities
undertaken by the third-party, are in keeping with its outsourcing policy.
2. The BTI shall establish a comprehensive outsourcing risk management programme to
address the outsourced activities and the relationship with the third party.
2.1. A BTI shall make an assessment of outsourcing risk which depends on several
factors, including the scope and materiality of the outsourced activity, etc. The factors
that could help in considering materiality in a risk management programme include-
a. The impact of failure of a third party to adequately perform the activity on the financial,
reputational and operational performance of the BTI and on the investors I clients;
b. Ability of the BTI to cope up with the work, in case of non performance or failure by a
third party by having suitable back-up arrangements;
c. Regulatory status of the third party, including its fitness and probity status;
d. Situations involving conflict of interest between the BTI and the third party and the
measures put in place by the BTI to address such potential conflicts, etc.
2.2 While there shall not be any prohibition on a group entity I associate of the
BTI to act as the third party, systems shall be put in place to have an arm's length distance
between the BTI and the third party in terms of infrastructure, manpower, decision-
making, record keeping, etc. for avoidance of potential conflict of interests. Necessary
Page 35 of 42
disclosures in this regard shall be made as part of the contractual agreement. It
shall be kept in mind that the risk management practices expected to be adopted by an
BTI while outsourcing to a related party or an associate would be identical to those
followed while outsourcing to an unrelated party.
2.3 The records relating to all activities outsourced shall be preserved centrally so that the
same is readily accessible for review by the Board of the BTI and I or its senior
management, as and when needed. Such records shall be regularly updated and may
also form part of the corporate governance review by the management of the BTI.
2.4 Regular reviews by internal or external auditors of the outsourcing policies, risk
management system and requirements of the regulator shall be mandated by the Board
wherever felt necessary. The BTI shall review the financial and operational capabilities
of the third party in order to assess its ability to continue to meet its outsourcing
obligations.
3. The BTI shall ensure that outsourcing arrangements neither diminish its ability to fulfill
its obligations to customers and regulators, nor impede effective supervision by the
regulators.
3.1 The BTI shall be fully liable and accountable for the activities that are being outsourced
to the same extent as if the service were provided in-house.
3.2 Outsourcing arrangements shall not affect the rights of an investor or client against the
BTI in any manner. The BTI shall be liable to the investors for the loss incurred by them
due to the failure of the third party and also be responsible for redressal of the grievances
received from investors arising out of activities rendered by the third party.
3.3 The facilities / premises / data that are involved in carrying out the outsourced activity by
the service provider shall be deemed to be those of the BTI. The BTI itself and regulator
or the persons authorized by it shall have the right to access the same at any point of
time.
3.4 Outsourcing arrangements shall not impair the ability of SEBI/SRO or auditors to exercise
its regulatory responsibilities such as supervision/inspection of the BTI.
4. The BTI shall conduct appropriate due diligence in selecting the third party and in
monitoring of its performance.
4.1 It is important that the BTI exercises due care, skill, and diligence in the selection
of the third party to ensure that the third party has the ability and capacity to undertake
the provision of the service effectively.
4.2 The due diligence undertaken by an BTI shall include assessment of:
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a. third party's resources and capabilities, including financial soundness, to perform
the outsourcing work within the timelines fixed;
b. compatibility of the practices and systems of the third party with the BTI's requirements
and objectives;
c. market feedback of the prospective third party's business reputation and track
record of their services rendered in the past;
d. level of concentration of the outsourced arrangements with a single third party; and
e. the environment of the foreign country where the third party is located.
5. Outsourcing relationships shall be governed by written contracts / agreements / terms
and conditions (as deemed appropriate) {hereinafter referred to as "contract"} that
clearly describe all material aspects of the outsourcing arrangement, including the
rights, responsibilities and expectations of the parties to the contract, client
confidentiality issues, termination procedures, etc.
5.1 Outsourcing arrangements shall be governed by a clearly defined and legally binding
written contract between the BTI and each of the third parties, the nature and detail of
which shall be appropriate to the materiality of the outsourced activity in relation to
the ongoing business of the BTI.
5.2 Care shall be taken to ensure that the outsourcing contract:
a. clearly defines what activities are going to be outsourced, including appropriate
service and performance levels;
b. provides for mutual rights, obligations and responsibilities of the BTI and the third
party, including indemnity by the parties;
c. provides for the liability of the third party to the BTI for unsatisfactory performance /
other breach of the contract
d. provides for the continuous monitoring and assessment by the BTI of the third party
so that any necessary corrective measures can be taken up immediately, i.e., the contract
shall enable the BTI to retain an appropriate level of control over the outsourcing and the
right to intervene with appropriate measures to meet legal and regulatory obligations;
e. includes, where necessary, conditions of sub-contracting by the third-party, i.e. the
contract shall enable BTI to maintain a similar control over the risks when a third party
outsources to further third parties as in the original direct outsourcing;
f. has unambiguous confidentiality clauses to ensure protection of proprietary and
customer data during the tenure of the contract and also after the expiry of the contract;
g. specifies the responsibilities of the third party with respect to the IT security and
contingency plans, insurance cover, business continuity and disaster recovery plans,
force majeure clause, etc.;
h. provides for preservation of the documents and data by third party;
i. provides for the mechanisms to resolve disputes arising from implementation of the
outsourcing contract;
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j. provides for termination of the contract, termination rights, transfer of information and
exit strategies;
k. addresses additional issues arising from country risks and potential obstacles in
exercising oversight and management of the arrangements when BTI outsources its
activities to foreign third party. For example, the contract shall include choice-of-law
provisions and agreement covenants and jurisdictional covenants that provide for
adjudication of disputes between the parties under the laws of a specific jurisdiction;
I. neither prevents nor impedes the BTI from meeting its respective regulatory
obligations, nor the regulator from exercising its regulatory powers; and
m. provides for the BTI and /or the regulator or the persons authorized by it to have the
ability to inspect, access all books, records and information relevant to the outsourced
activity with the third party.
6. The BTI and its third parties shall establish and maintain contingency plans, including
a plan for disaster recovery and periodic testing of backup facilities.
6.1 Specific contingency plans shall be separately developed for each outsourcing
arrangement, as is done in individual business lines.
6.2 BTI shall take appropriate steps to assess and address the potential consequence of a
business disruption or other problems at the third party level. Notably, it shall consider
contingency plans at the third party; co-ordination of contingency plans at both the BTI
and the third party; and contingency plans of the BTI in the event of non-performance by
the third party.
6.3 To ensure business continuity, robust information technology security is a necessity. A
breakdown in the IT capacity may impair the ability of the BTI to fulfill its obligations to
other market participants / clients / regulators and could undermine the privacy interests
of its customers, harm the BTI's reputation, and may ultimately impact on its overall
operational risk profile. BTIs shall, therefore, seek to ensure that third party maintains
appropriate IT security and robust disaster recovery capabilities.
6.4 Periodic tests of the critical security procedures and systems and review of the back up
facilities shall be undertaken by the BTI to confirm the adequacy of the third party's
systems.
7. The BTI shall take appropriate steps to require that third parties protect confidential
information of both the BTI and its customers from intentional or inadvertent
disclosure to unauthorised persons.
7.1 BTI that engages in outsourcing is expected to take appropriate steps to protect its
proprietary and confidential customer information and ensure that it is not misused or
misappropriated.
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7.2 The BTI shall prevail upon the third party to ensure that the employees of the third party
have limited access to the data handled and only on a "need to know" basis and the third
party shall have adequate checks and balances to ensure the same.
7.3 In cases where the third party is providing similar services to multiple entities, the BTI
shall ensure that adequate care is taken by the third party to build safeguards for data
security and confidentiality.
8. Potential risks posed where the outsourced activities of multiple BTIs are concentrated
with a limited number of third parties.
8.1. In instances, where the third party acts as an outsourcing agent for multiple BTIs, it is the
duty of the third party and the BTI to ensure that strong safeguards are put in place so
that there is no co-mingling of information /documents, records and assets.
Page 39 of 42
Appendix
LIST OF RESCINDED CIRCULARS
S. Circular No. and Date Subject / Title
No.
1. SEBI RBTI(G I Series) CIRCULAR No. 1(95-96) Submission of quarterly reports for
dated April 21, 1995 each quarter of the year
2. BTI CIRCULAR NO.3 (1999-2000) dated July 9, All Bankers to Issues
1999
3. SEBI Circular No. MIRSD/DPS III/Cir-01/07 Exclusive e-mail ID for redressal of
dated January 22, 2007 Investor Complaints
4. SEBI Circular MRD/DoP/Cir-05/2007 dated April Permanent Account Number (PAN)
27, 2007 to be the sole identification number
for all transactions in the securities
market
5. SEBI Circular No. MIRSD/DPS-2/BTI/Cir- Reporting of Information on a
15/2008 dated May 06, 2008 periodic basis
6. SEBI Circular No. MRD/DoP/Cir-20/2008 dated Mandatory requirement of
June 30, 2008 Permanent Account Number (PAN)
7. SEBI Circular No. MIRSD/ DPSIII/ Cir-21/ 08 Designated e-mail ID for regulatory
dated July 07, 2008 communication with SEBI
8. SEBI Circular No. Cir/ISD/1/2011 dated March Unauthenticated news circulated by
23, 2011 SEBI Registered Market
Intermediaries through various
modes of communication
9. SEBI Circular No. Cir/ISD/2/2011 dated March Unauthenticated news circulated by
24, 2011 SEBI Registered Market
Intermediaries through various
modes of communication
10. SEBI Circular No. CIR/MIRSD/11/2011 dated Periodical Report – Grant of prior
June 20, 2011 approval to Bankers to an Issue
11. SEBI Circular No. CIR/MIRSD/24/2011 dated Guidelines on Outsourcing of
December 15, 2011 Activities by Intermediaries
12. SEBI Circular No. CIR/MIRSD/4/2012 dated Review of Regulatory Compliance
March 29, 2012 and Periodic Reporting
Page 40 of 42
LIST OF RESCINDED CIRCULARS
S. Circular No. and Date Subject / Title
No.
13. SEBI Circular No. CIR/MIRSD/5/2013 dated General Guidelines for dealing
August 27, 2013 with Conflicts of Interest of
Intermediaries, Recognised Stock
Exchanges, Recognised Clearing
Corporations, Depositories and
their Associated Persons in
Securities Market
14. SEBI Circular No. CIR/MIRSD/3/2014 dated Information regarding Grievance
August 28, 2014 Redressal Mechanism
15. SEBI Circular No. CIR/MIRSD/2/2015 dated Implementation of the Multilateral
August 26, 2015 Competent Authority Agreement and
Foreign Account Tax Compliance
Act
16. SEBI Circular No. CIR/MIRSD/3/2015 dated Reporting requirement under
September 10, 2015 Foreign Account Tax Compliance
Act (FATCA) and Common
Reporting Standard (CRS)-
Guidance Note
17. SEBI Circular No. Online Registration Mechanism for
SEBI/HO/MIRSD/MIRSD1/CIR/P/2017/38 dated Securities Market Intermediaries
May 02, 2017
18. SEBI Circular No. Strengthening the Guidelines and
SEBI/HO/MIRSD/DOP1/CIR/P/2018/73 dated Raising Industry Standards for RTA,
April 20, 2018 Issuer Companies and Bankers to
an Issue
19. SEBI Circular No. Advisory for Financial Sector
SEBI/HO/MIRSD/DOR/CIR/P/2020/221 dated Organizations regarding Software as
November 03 2020 a Service (SaaS) based solutions
20. SEBI Circular No. Transfer of business by SEBI
SEBI/HO/MIRSD/DOR/CIR/P/2021/46 dated registered intermediaries to other
March 26, 2021 legal entity
21. SEBI Circular No. Prior Approval for Change in control:
SEBI/HO/MIRSD/DOR/CIR/P/2021/42 dated Transfer of shareholdings among
March 25 2021 immediate relatives and
transmission of shareholdings and
their effect on change in control
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LIST OF RESCINDED CIRCULARS
S. Circular No. and Date Subject / Title
No.
22. SEBI Circular No. Permitting non-scheduled Payments
SEBI/HO/MIRSD/MIRSD_DOR/P/CIR/605/2021 Banks to register as Bankers to an
dated August 03, 2021 Issue
23. SEBI Circular No. SEBI/HO/CFD/PoD- Procedure for seeking prior approval
2/P/CIR/2023/141 dated August 10, 2023 for change in control with respect to
Merchant Bankers and Bankers to
an issue.
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