{"id":6942,"date":"2018-02-03T16:00:25","date_gmt":"2018-02-03T10:30:25","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=6942"},"modified":"2019-09-10T17:53:52","modified_gmt":"2019-09-10T12:23:52","slug":"sebi-custodian-securities-regulations-1996","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/sebi-custodian-securities-regulations-1996\/","title":{"rendered":"SEBI (CUSTODIAN OF SECURITIES) REGULATIONS, 1996"},"content":{"rendered":"<p><strong>Meaning:<\/strong><\/p>\n\n\n\n<p>Custodial Services in relation to securities of a Client or Gold or Gold related instruments held by a mutual fund or title deeds of real estate assets held by a real estate mutual fund scheme. It also includes:<\/p>\n\n\n\n<ul><li>Maintaining accounts of securities or gold or gold related instruments or title deeds of real estate assets of a Client.<\/li><li>Undertaking activities as a Domestic Depository in terms of Companies (Issue of <strong>Indian Depository Receipts<\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Indian_Depository_Receipt\">[1]<\/a><\/sup>) Rules, 2004;<\/li><li>Collecting the benefits or rights accruing to the client in respect of securities or gold or gold related instruments or title deeds of real estate assets;<\/li><li>Keeping the client informed of the actions taken or to be taken by the issuer of securities, having a bearing on the benefits accruing to the client.<\/li><li>Maintaining &amp; reconciling records of the services<\/li><\/ul>\n\n\n\n<p>It prevents the theft or loss of securities. SEBI,  It holds securities &amp; other assets in electronic or physical form. The fees charged by custodians depends upon the clients &amp; their desires.<\/p>\n\n\n\n<p>E.g.: BNP Paribus security services, Bank of America, JP Morgan Chase, Citi Group, Axis Ltd.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Process:<\/strong><\/h2>\n\n\n\n<p>An Application for grant of Certificate shall be made in Form A to SEBI accompanied by application fees. An application that is incomplete in all respects or which does not conform to the instructions specified shall be rejected. Provided before rejecting such application, a reasonable opportunity of being heard should be given to the applicant.<\/p>\n\n\n\n<p>If the application is fine in all respects, Board shall be satisfied that all particulars have been furnished &amp; the applicant is eligible for grant of a certificate.<\/p>\n\n\n\n<p>Thereafter, the grant of Certificate in Form B upon receipt of the registration fee.<\/p>\n\n\n\n<p><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/enterslice.com\/learning\/sebi-guidelines-for-making-public-offer\/\" target=\"_blank\" rel=\"noopener noreferrer\">SEBI Guidelines for Making Public Offer<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Consideration of Application:<\/strong><\/h2>\n\n\n\n<ul><li>The applicant must fulfill the <a href=\"https:\/\/enterslice.com\/learning\/minimum-capital-requirement-nbfcs\/\"><strong>capital requirements<\/strong>.<\/a><\/li><li>The applicant has the necessary infrastructure, adequate office space, vaults for the safe custody of securities &amp; computer system capability, required to discharge his activities.<\/li><li>The applicant has the requisite approvals under any law for the time being in force, in connection with providing custodial services related to Gold or Gold related instruments of a mutual fund.<\/li><li>The applicant is a fit &amp; proper person.<\/li><li>It shall enter into a valid agreement with the Client for the purpose of providing custodial services.<\/li><li>It shall not carry on any activity other than activities related to the rendering of financial services.<\/li><li>The applicant has in his employment competent persons who have the capacity to manage the same.<\/li><li>Grant of Certificate is in the interest of investors.<\/li><li>The applicant has prepared a complete manual, setting out the systems &amp; procedures to be followed by him for the effective discharge of his functions.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Capital Requirement &amp; Other Aspects: <\/strong><\/h2>\n\n\n\n<ul><li>The net worth of a minimum of rupees 50 Cr.<\/li><li>Validity period: 3 years from the date of the grant of registration or renewal.<\/li><li>Every Custodian of securities shall abide by the Code of Conduct as set out in the third schedule.<\/li><li>Every Custodian shall open a separate account for each client whose security is in custody. Also, they have to enter into an agreement with each client on whose behalf it is acting as custodian.<\/li><li>Every Custodian shall have internal controls to prevent manipulation of records &amp; documents including an audit of securities held on behalf of the client.<\/li><li>Every Custodian shall preserve the records &amp; documents for a minimum period of 5 years.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Fees:<\/strong><\/h2>\n\n\n\n<ul><li><strong>Application Fees: 5,00,000\/-<\/strong><\/li><li><strong>Registration Fees: 50,00,000\/-<\/strong><\/li><li><strong>Annual Fees: 10, 00,000 or 0.0005 % of the assets under custody of securities, whichever is higher. <\/strong><\/li><\/ul>\n\n\n\n<p>&nbsp;&nbsp;Fees specified shall be payable by demand draft or bankers cheque in favor of &lsquo;<strong>SEBI<\/strong><sup><a href=\"https:\/\/www.sebi.gov.in\/legal\/acts\/jan-1992\/securities-and-exchange-board-of-india-act-1992-as-amended-by-the-finance-act-2017-_3.html\">[2]<\/a><\/sup>&rsquo; at Mumbai.&nbsp; <\/p>\n\n\n\n<p><strong>*<\/strong>Custodians are clearing members not trading members. A trading member may assign a particular trade to a custodian for settlement.<\/p>\n\n\n\n<p><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/enterslice.com\/learning\/sebi-depository-participant-regulations\/\" target=\"_blank\" rel=\"noopener noreferrer\">SEBI (Depository Participant Regulations), 1996\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Meaning: Custodial Services in relation to securities of a Client or Gold or Gold related instruments held by a mutual fund or title deeds of real estate assets held by a real estate mutual fund scheme. It also includes: Maintaining accounts of securities or gold or gold related instruments or title deeds of real estate [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":6944,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1599],"tags":[377],"acf":{"service_id":"227"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SEBI Regulation 1996: Custodian of Securties - Enterslice<\/title>\n<meta name=\"description\" content=\"An Application for grant of Certificate shall be made in Form A to SEBI accompanied by application fees. 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