MASTER CIRCULAR SEBI/HO/MRD2/DDAP/CIR/P/2021/18 February 05, 2021 To, All Depositories Dear Sir / Madam, Subject: Master Circular for Depositories 1. Securities and Exchange Board of India (SEBI), from time to time, has been issuing various circulars/directions to Depositories. In order to enable the users to have access to all the applicable circulars/directions at one place, Master Circular for Depositories has been prepared. 2. This Master Circular is a compilation of the relevant circulars/communications pertaining to Depositories issued by SEBI up to October 31, 2020 and shall come into force from the date of its issue. References in the Master Circular to the Statutes/Regulations which now stand repealed, have been suitably updated. 3. In case of any inconsistency between the Master Circular and the applicable circulars, the content of the applicable/ relevant circular shall prevail. 4. The Master Circular consists of four sections i.e. Beneficial Owner (BO) Accounts, Depository Participants (DP) Related, Issuer related and Depositories Related. Efforts have been made to include provisions of circulars/ communications relevant to each sections. However, cross referencing of circulars/ communications amongst the sections may exist. Users may refer other sections also for compliance to provisions applicable to them. 5. This Master Circular shall supersede previous Master Circular SEBI/HO/MRD/DP/CIR/P/118 dated October 25, 2019 and is available on SEBI website at www.sebi.gov.in. Yours faithfully Rishi Barua Deputy General Manager 1 Table of Contents Section - 1: Beneficial Owner (BO) Accounts 1.1 Opening of BO Account by non-body corporates 1.1.1 Proof of Identity (PoI) 1.1.2 Proof of Address (PoA) 1.1.3 Clarification on voluntary adaptation of Aadhaar based e-KYC process 1.1.4 SARAL Account Opening Form for resident individuals 1.1.5 Clarifications with regard to KYC requirement for eligible Foreign Investors 1.1.6 Acceptance of third party address as correspondence address 1.2 Exemptions from and clarifications relating to mandatory requirement of PAN 1.3 Simplification of demat account opening process (DP-BO Rights and Obligation Document) 1.4 Opening of demat account in case of HUF 1.5 Operation of minor’s demat account 1.6 Facility for a Basic Services Demat Account (BSDA) 1.7 Change of Name in the Beneficial Owner (BO) Account 1.8 Fees/Charges to be paid by BO 1.9 Safeguards on transfer of securities in dematerialized mode 1.10 Delivery Instruction Slip (DIS) Issuance and Processing 1.11 Transmission of shares 1.12 Execution of Power of Attorney (PoA) by the Client in favour of the Stock Broker/ Stock Broker and Depository Participant 1.13 SMS alerts for demat accounts operated by Power of Attorney 1.14 Exemption from sending quarterly statements of transactions by depository participants (DPs) to clients in respect of demat accounts with no transactions and no security balances 1.15 Discontinuation of sending transaction statements by depository participants to clients 1.16 Exemption to Depository Participants (DPs) from providing hard copies of transaction statements to BOs 1.17 Transfer of funds and securities from Clearing Member pool account to BO Account 1.18 Consolidated Account Statement (CAS) for all securities assets 1.19 Review of Dividend option(s) / Plan(s) in case of Mutual Fund Schemes 1.20 Procedure for filing and redressal of investor grievances using SCORES 1.21 Framework for the process of accreditation of investors for the purpose of Innovators Growth Platform 1.22 Common Application Form for Foreign Portfolio Investors 1.23 Permitting Foreign Portfolio Investors (FPI) to invest in Municipal Bonds Section - 2: Depository Participants (DP) Related 2.1 Online Registration Mechanism for Securities Market Intermediaries 2.2 Supervision of branches of depository participants 2 2.3 Incentivisation to Depositories Participants (DPs) 2.4 Implementation of the Multilateral Competent Authority Agreement and Foreign Account Tax Compliance Act 2.5 Printing of Grievances Redressal Mechanism on Delivery Instruction Form Book 2.6 Operationalisation of Central KYC Records Registry (CKYCR) 2.7 e-KYC Authentication facility under section 11A of the Prevention of Money Laundering Act, 2002 by Entities in the securities market for Resident Investors and Entities permitted to undertake e-KYC Aadhaar Authentication service of UIDAI in Securities Market 2.8 Clarification on Know Your Client (KYC) Process and Use of Technology for KYC 2.9 Recording of Non Disposal Undertaking(NDU)in the Depository System 2.10 Recording of all types of Encumbrances in Depository system 2.11 Cyber Security & Cyber Resilience framework for Depository Participants 2.12 Reporting for Artificial Intelligence (AI) and Machine Learning (ML) applications and systems offered and used by market intermediaries 2.13 Flashing a link to SCOREs on the dashboard of Demat Accounts 2.14 Displaying of information regarding SEBI Complaint Redress System (SCORES) in the website Section - 3: Issuer related 3.1 Charges to be paid by Issuers 3.2 Activation of International Securities Identification Number (ISIN) in case of IPOs and additional issue of shares/ securities 3.3 Streamlining the Process of Rights Issue 3.4 Registrar and Share Transfer Agents 3.5 Mandatory admission of debt instruments on both the Depositories 3.6 Specifications related to International Securities Identification Number (ISINs) for debt securities issued under the SEBI (Issue and Listing of Debt Securities) Regulations, 2008. 3.7 American Depository Receipts (ADRs)/Global Depository Receipts (GDRs) 3.8 Framework for issue of Depository Receipts (DRs) 3.9 Issuance, listing and trading of Perpetual Non-Cumulative Preference Shares (PNCPS) and Innovative Perpetual Debt Instruments (IPDIs)/ Perpetual Debt Instruments (PDIs) (commonly referred to as Additional Tier 1 (AT 1) instruments) 3.10 Electronic Clearing System (ECS) facility 3.10.1 Use of ECS for refund in public/ rights issues 3.10.2 Usage of electronic payment modes for making cash payment to the investors 3.11 Withdrawal by issuers from the depository 3.12 Further issue of shares under Section 86 of Companies Act and Companies (Issue of Share capital with Differential Voting Rights) Rules, 2001 3.13 Streamlining issuance of SCORES Authentication for SEBI registered intermediaries 3 3.14 Clarification on applicability of regulation 40(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to open offers, buybacks and delisting of securities of listed entities 3.15 Continuous disclosures and compliances by listed entities under SEBI (Issue and Listing of Municipal Debt Securities) Regulations, 2015 3.16 Non-compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Standard Operating Procedure for suspension and revocation of trading of specified securities 3.17 Investor grievances redressal mechanism – Handling of SCORES complaints by stock exchanges and Standard Operating Procedure for non- redressal of grievances by listed companies 3.18 Automation of Continual Disclosures under Regulation 7(2) of SEBI (Prohibition of Insider Trading) Regulations, 2015 - System driven disclosures 3.19 System-Driven Disclosures (SDD) under SEBI (SAST) Regulations, 2011 3.20 Streamlining the Process of Public Issue of Equity Shares and convertibles- implementation of Phase II of Unified Payments Interface with Application Supported by Blocked Amount 3.21 Standardization of timeline for listing of securities issued on a private placement basis Section - 4: Depositories Related 4.1 Online Registration Mechanism and Filing System for Depositories 4.2 Activity schedule for depositories for T+2 rolling Settlement 4.3 Settlement of transactions in case of holidays 4.4 Deadline time for accepting non pay-in related instructions 4.5 Approval of amendments to Bye Laws / Rules of Stock Exchanges and Depositories 4.6 Preservation of Records 4.7 Facilitating transaction in Mutual Fund schemes through the Stock Exchange Infrastructure 4.8 Pledge of Shares through depository system 4.9 Margin obligations to be given by way of Pledge/ Re-pledge in the Depository System 4.10 Foreign investments in infrastructure companies in securities markets 4.11 Designated e-mail ID for regulatory communication with SEBI 4.12 Designated e-mail ID for redressal of investor complaints 4.13 Redressal of complaints against Stock Exchanges and Depositories through SEBI Complaints Redress System (SCORES) 4.14 Limitation period for filing an arbitration reference 4.15 Disclosure of investor complaints and arbitration details on Depository website 4.16 Disclosure of regulatory orders and arbitration awards on Depository website 4.17 Guideline for websites of depositories 4 4.18 Arbitration / Appellate Arbitration fees on the remanded back matter for fresh arbitration proceedings 4.19 Establishment of connectivity by Clearing House / Clearing Corporation (CH/CC) with the Depository – Clarification 4.20 Computing and monitoring of the Aggregate Value of Portfolio of Securities (AVPS) of the BOs held in dematerialised form by Stock Broker DPs 4.21 Rajiv Gandhi Equity Savings Scheme, 2012 (RGESS) 4.22 Principles of Financial Market Infrastructures (PFMIs) 4.23 Annual System Audit of Depositories 4.24 Guidelines for Business Continuity Plan (BCP) and Disaster Recovery(DR) 4.25 (Information Technology) IT Governance for Depositories 4.26 Guidelines for inspection of Depository Participants (DPs)