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Registrar and Share Transfer Agent

  • Rudri Rawell
  • Feb 15 2022
  • 6 minutes
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In today’s fast-paced investment scenario, mutual fund houses, publicly traded companies, and other financial establishments have to deal with a large investor base. These investors may want to perform multiple transactions within a day, including buying, selling or switching of security units. For such transactions, investors will need accurate information or records. So, how can investors access the transaction-related information on time? 

There are institutions in the country who have the authority and responsibility to maintain records of such transactions. These are called registrar and share transfer agents. 

What are registrar and share transfer agents?

RTA or registrar and share transfer agents are institutions that maintain investor’s transaction records. The transactions recorded by RTAs include:

  1. issuing of certificates, 
  2. sending notices related to corporate actions, etc.

Some of the other details handled by RTAs are:

  1. determining the list of shareholders who are eligible to receive the shares in IPO,
  2. dividend payments, 
  3. bonus shares issue and
  4. interest payments to bondholders

What is the role of an RTA in securities investment?

RTAs essentially play the role of record keeping of every mutual fund or securities investors’ transactions. The different types of transactions include:

  1. buying, 
  2. selling, 
  3. switching in or out of an investment.

RTAs also assist investors in changing bank mandates and updating any necessary personal information. All the transactions of an investor are maintained by a single RTA organization, even if the investment is made with multiple AMCs or companies. RTAs have the right professional skills required for maintaining investor and company/AMC data. Most RTAs offer online services apart from having a wide network in the country.

What are the services offered by registrar and share transfer agents?

Registrars and share transfer agents offer services to corporations, AMCs, mutual fund distributors and also investors. Here are the details:

RTA services to AMCs

RTAs provide services to asset management companies or AMCs in the form of :

  1. account statements, 
  2. newsletters, 
  3. sending other essential communication on behalf of AMC. They help AMCs in sharing important information with investors and distributors. 

In return for their services, RTAs charge the fund houses. The AMC then passes on this cost to the investor as a part of the annual maintenance charges applied by mutual funds. 

Since most RTAs have a large network across the nation, their services cost less and this helps fund houses in reducing costs. With RTA offices across multiple locations of India, fund houses can manage without opening multiple branches themselves in all the places.

RTA services to MF distributors

RTAs also provide services to MF distributors. They essentially offer:

  1. assistance in buying and selling funds on behalf of investors
  2. a report of sales done by distributors during a specified duration 
  3. transaction details of investors for any frequency, including monthly, quarterly, or yearly 
  4. online services for distributors to avail any transaction related reports from the RTA website

Lately, RTAs have also started offering Know-Your-Distributor (KYD) processing services. As part of this, the RTA processes KYD forms for distributors. 

RTA services to mutual fund investors

Here are the services offered by RTA to mutual fund investors:

  1. Investment and transactions: 

RTAs, through their platform, offer online services, thereby enabling investors to transact easily with mutual fund companies. Investors can easily invest in new fund offers (NFOs) or with a registered MF company via an RTA.

  1. Statement generation: 

RTA agents help investors generate different types of statements, such as:

  1. consolidated account statement or CAS, 
  2. gains statements
  3. portfolio valuation statements, 
  4. transaction details of a single folio, 

An investor can examine these statements to perform a periodic review of his/her mutual fund portfolio. Apart from these, investors can also request the following services with RTA:

  • nomination form
  • redemption
  • cancellation request of SIP, STP or SWP
  • bank detail changes
  • consolidation of multiple folios owned by an investor under a single folio
  • records updation for changing an individual investor from minor to major, as applicable
  • CKYC (Central Know Your Customer) forms

RTA services to stock investors

Here are some of  the services offered by share transfer agents to stock market investors:

  • securities transfer
  • record keeping 
  • intimation on new fund offers 
  • endorsing certificates of allotment
  • transmission, consolidation and sub-division of securities
  • dispatch of transferred or consolidated securities 
  • cancellation of the name and share certificate of investors who sell the shares 

RTA services to alternative fund investors

RTAs also provide the following services to investors who have invested in alternative investment funds or AIFs and portfolio management services:

  • pre-launch support
  • fund accounting
  • value-added services
  • investor servicing
  • KYC
  • Document management services
  • Knowledge and technology partnering

Conclusion

Registrar and share transfer agents help corporates, mutual fund houses, banks and financial institutions to keep a close track of the investment such that they can further design policies for improving the investment with minimum risk. These are the authorized bodies responsible for maintaining financial equilibrium through accurate record-keeping of transactions that are being made by investors every day.

FAQs

Why do mutual fund houses appoint registrar and transfer agents?

Since mutual funds carry out a number of transactions every day, they need to maintain a record of all these transactions along with associated details and changes. Since this requires specialization, they hire transfer agents to look after the record maintenance and updates.

How do mutual fund houses benefit from transfer agent services?

Since there are multiple investors involved along with multiple schemes, it becomes difficult for fund houses to do the record keeping efficiently. Hiring a transfer agent can help mutual funds in saving substantial amounts of expenses associated with maintaining and updating records of all transactions.

Who regulates registrar and share transfer agents?

RTAs come under the regulation of SEBI or Securities and Exchange board of India.

Who can appoint registrar and share transfer agents?

Companies, mutual fund houses, banks and other financial institutions can avail the services offered by registrars and share transfer agents.

Do registrars and share transfer agents only process financial transactions?

Registrars and share transfer agents can process both financial and non-financial transactions. This allows companies, fund houses, etc to gain efficiency in day-to-day transactions and record-keeping as RTAs look after maintenance of the back-end information.

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