MUMBAI, Mar 19: The Securities and Exchange Board of India (Sebi) has decided to appoint administrators to implement the signature guarantee and certificate authentication programmes in a bid to get rid of bad deliveries. The two programmes, which form part of the Chandrasekharan committee report, will be taken up by the markets regulator with stock exchanges in mid-April, said sources. Sources said details of the signature guarantee programme have already been chalked out and applications for "administrators" for the same have been invited. The administrators appointed by Sebi would act on behalf of the regulator in resolving problems arising out of a signature mismatch.
In order to qualify as an administrator, an individual would need a financial background. An individual working at a financial institution, bank, depository participant or a broking outfit could consider applying.Sources maintained that the regulator has called for applications from individuals interested in taking up such achallenge.
``The programme has been designed in an exclusive manner based on the medallion system of verifying the buyer's and seller's signatures,'' explained a source. As part of the programme, the administrators would be also be required to appoint `mediators'. The mediators would be registered with Sebi and would be required to fulfill certain criteria as prescribed by it.
``The mediator would be required to play a vital role in the actual implementation of the programme, build a link between the company, investor and the regulator,'' said a source. According to sources, after having studied the problems faced by the individual investors and stock exchanges on account of discrepancies or differences in the format of the share certificates issued by different companies, the regulator has decided to work on a standard format for share certificates.
``These programmes will not only help us wipe out the menace of bad delivery but also help in reducing the time required in the transfer of shares,''explained the source. ``Many of the problems are actually due to signature differences, hence, the mediators at the grassroots levels with the training and expertise provided by Sebi could help avoid it,'' he further said.
The introduction of these programmes will, however, have no impact on the existing good and bad delivery norms laid down by Sebi. Interestingly, the administrators and mediators are likely to be provided with an insurance cover.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
