New Delhi, January 2, 2017

Registrars to a public issue should exercise due diligence and make all reasonable efforts to avoid misrepresentation of facts, according to Sebi.

The capital market regulator has given its views, based on existing norms, in response to an informal guidance sought by SBI Capital Markets with respect to Issue of Capital and Disclosure Requirements (ICDR) regulations.

"Sebi (Registrar to Issue and Share Transfer Agents) regulations... Require registrars to fulfil their obligations in a prompt, ethical and professional manner, exercise due diligence, ensure proper care and exercise independent professional judgement and make all reasonable efforts to avoid misrepresentations," the watchdog said today.

SBI Capital Markets had sought an interpretative letter asking whether a registrar is responsible for carrying out any checks beyond rejecting multiple applications and undertaking technical rejection based on electronic bid.

It had also asked whether a registrar is expected to rely on electronic bid details for Qualified Institutional Buyer (QIB) bids or is it expected to carry out checks to verify the QIB status.

Another query was that if the registrar is expected to rely on the electronic bid details, then who is expected to verify the QIB status and what documents should be relied upon.

The Securities and Exchange Board of India (Sebi) said that a registrar to the issue would be responsible for discharging their duties as per roles and responsibilities laid down in the circulars regarding Sebi (ICDR) regulations, 2009.

Different facts or conditions might require a different result, Sebi said, adding that "This letter does not express a decision of the board on the questions referred".

The watchdog said its views are expressed with respect to clarification sought in terms of Sebi (ICDR) regulations and are not applicable to any other Sebi regulations.

[The Business Standard]