3 August 2021

Relaxation in timelines for compliance with regulatory requirements by SEBI

The COVID-19 pandemic has been disruptive to life and business. With the second wave of the pandemic gradually drawing to a slow end, anxious anticipation for the third wave has unquestioningly begun. In view of the difficulties and bottlenecks that have arisen owing to the pandemic and on account of representations that have been received from Stock Exchanges, the Securities and Exchanges Board of India (SEBI) has decided to extend the timelines for compliances with regulatory requirements by Trading Members, Clearing Members, KYC Registration Agencies. The extended timelines have been laid down in Circular SEBI/HO/MIR SD/DOP/P/CIR/2021/607 dated 31 July 2021.

Link to Circular: https://www.sebi.gov.in/legal/circulars/jul-2021/relaxation-in-timelines-for-compliance-with-regulatory-requirements_51497.html

Overview of Circular SEBI/HO/MIR SD/DOP/P/CIR/2021/607 and the extensions to regulatory compliances are as under:

Sr. No	Submission/Compliance	Current Timeline	Extended Timeline
1	KYC application form and supporting documents of the clients to be uploaded on the system of KRA within ten working days.	Till 31 July 2021. Documents are to be uploaded on the system of KRA within 15 working days. A 30-day time period is provided to SEBI Registered Intermediary after 31 July 2021 to clear the backlog	Till 31 July 2021. Documents are to be uploaded on the system of KRA within 15 working days A 30-day time period is provided to SEBI Registered Intermediary after 30 September 2021 to clear the backlog
2	Submission of Internal Audit Report for Half-year ended (HYE) March-2021	Till 31 July 2021	Till 30 September 2021
3	System Audit/Cyber Audit Report - Algo/Type III Members for the period ended 31 March 2021	Till 31 July 2021	Till 30 September 2021
4	Submission of System Audit Report for the period ended March 2021	Till 31 July 2021	Till 30 September 2021
5	Submission of Cyber Security and Cyber Resilience Audit Report for the period ended March 2021	Till 31 July 2021	Till 30 September 2021
6	Reporting of Risk-Based Supervision	Till 31 July 2021	Till 30 September 2021
7	Maintaining call records of orders/ instructions received from clients This relaxation in compliance requirement is provided with respect to trading members working from designated alternate locations. However, the trading member and the Stock Exchange shall send a confirmation on the registered mobile number of the client immediately after execution of the order.	Till 31 July 2021	Till 30 September 2021
8	To operate training terminals from designated locations	Till 31 July 2021	Till 31 December 2021

Our Comments
The above relaxations are testimony to the quantum of challenges that have arisen in doing business as well as ensuring requisite regulatory compliances in times of the pandemic. Such relaxations in filing of compliance requirements have been announced by SEBI since 16 April 2020 vide various circulars. Although a relieving announcement in times of difficulty, the industry is surely aching to go back to normalcy. The economy and life at large did not have to circumvent such massive disruptions. SEBI granting such a cushion in the regulatory filings shall ensure that despite all operational and managerial challenges posed due to the pandemic, stakeholder protection and transparency in disclosures and compliances is upheld.

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