SEBI Decides to Relax Timelines for Compliance Requirements

Relaxing Timelines for Compliance Requirements
Shivani Jain
| Updated: Dec 05, 2020 | Category: Compliance, News, SEBI Advisory

Recently, SEBI (Securities Exchange Board of India) by way of Circular No CIR/ P/ 2020/ 235, issued on 01.12.2020, has notified about the “Relaxation Provided in Timelines for Compliance with the Regulatory Requirements due to COVID 19 pandemic”.

Further, such a Circular was passed in consequence of the representations made by Clearing Corporations or Stock Exchanges and Depositories.

In this blog, we will discuss the new timelines set by SEBI for meeting compliance requirements.

Reasons for Relaxing Timelines for Compliance Requirements

The issuance of circular was in consequence to the representations made by the Depositories and Clearing Corporation or Stock Exchanges to SEBI[1] regarding the extension of timelines for compliance requirements in this pandemic situations

Therefore, the main reason behind the issuance of the circular by SEBI was to provide relief to clearing or trading members in this pandemic situation.

Governing Law for Circular No CIR/P/2020/235

The circular regarding the relaxation of timelines was issued by SEBI under the provisions of section 11 (1) of the SEBI Act 1992 and section 19 of the Depositories Act 1996. Also, the same aims to protect the interest of investors in securities and to promote the development and regulation of the financial market.

Extended Timelines for Meeting Compliance Requirements by Stock Exchanges

The extended timelines for meeting compliance requirements by Stock Exchanges and Clearing Houses are as follows:

S.no Compliance Requirements New Extended Dates
1 Internal Audit for the half year ended on 30.09.2020. 31.12.2020
2 System Audit for the half year ended on 30.09.2020. 31.12.2020
3 Half yearly Certificate for Net Worth as on 30.09.2020. 31.12.2020
4 Cyber Security and Cyber Resilience Audit for the half year ended as on 30.09.2020. 31.12.2020

Extended Timelines for Meeting Compliance Requirements by Depositories

S.no Compliance Requirements New Extended Dates
1 Submission of the half yearly Internal Audit Report by Depository Participants for the half year ended on 30.09.2020. 31.12.2020
2 KYC (Know Your Customer) application form and other supporting documents of the clients are required to be uploaded on the system of KRA (KYC Registration Agency) within 10 business working days. The period of exclusion has been extended from 23.03.2020 to 31.12.2020. .Also, after 31.12.2020, a 15 days’ time period has been allowed to Depository/ DPs as well to clear the back log.
3 Systems Audit on an annual basis for the financial year ended on 31.03.2020. 31.03.2020

Other Directions For Stock Exchanges and Depositories

As per the Circular issued by SEBI, all the Stock Exchanges or Clearing Houses and Depositories are directed to inform their members regarding notification issued. Also, they need to disseminate the same information on their websites as well.

Conclusion

In a nutshell, the main reason behind the issuance of the circular by SEBI was to provide relief to the clearing or trading members in this pandemic situation. Also, the same was in consequence of the representations made by the Depositories and Clearing Corporation or Stock Exchanges to SEBI.

Further, in case of any doubt of dilemma, visit Swarit Advisors.

Also, Read: How to Become a Portfolio Manager Registered with SEBI

Circular No CIR/ P/ 2020/ 235

1606819746003

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