Usage of electronic payment modes for making cash payments to the investors
Summary
The circular mandates that listed companies use RBI-approved electronic payment modes for cash payments to investors. It requires companies and RTI/STAs to maintain updated bank details for both demat and physical security holders. The document supersedes previous circulars regarding ECS and warrants while directing stock exchanges and depositories to facilitate compliance.
Text
For making cash payments to the investors, companies whose securities are listed on the stock exchanges shall use, either directly or through their RTI & STA, any RBI approved electronic mode of payment such as ECS, NEFT, etc.
For investors that hold securities in demat mode, companies or their RTI & STA shall seek relevant bank details from the depositories.
For investors that hold physical share / debenture certificates, companies or their RTI & STA shall take necessary steps to maintain updated bank details of the investors at its end.
In cases where electronic payment instructions have failed or been rejected, companies or their RTI & STA may use physical payment instruments... Companies shall mandatorily print the bank account details of the investors on such payment instruments.
Stock exchanges are directed to bring the provisions of this circular to the notice of all the companies whose securities are listed on the stock exchange and also to disseminate the same on their website.
All companies whose securities are listed on Stock exchanges and their RTI & STA are directed to comply with the provisions of the circular.
Depositories are directed to provide to companies (or to their RTI & STA) updated bank details of their investors.
This circular shall supersede circular no. DCC/FITTCIR-3//2001 dated October 15, 2001 and circular no D&CC/FITTC/CIR-04/2001 dated November 13, 2001.
This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Usage of electronic payment modes for making cash payments to the investors. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.