Maker and checker
Also written Maker-checker · Maker-Checker concept
The internal control an RTA follows so that no single employee both processes and approves a document — one person (the maker) enters a request, and a second (the checker) verifies it before it takes effect.
In plain language
An RTA handles thousands of requests that change who owns what, or where a dividend gets paid. Letting one employee both make a change and approve it invites error, and worse, fraud. So the workbook builds in a second pair of eyes.
This is the maker and checker concept: one person processes a document, and a different person checks it before it is acted upon.
How it works
The workbook states this as a Standard Operating Procedure requirement for an RTA's client-servicing operations: "there shall be a maker and checker concept to be followed wherein the documents processed by the users." It sits alongside the RTA's other SOP controls — an Inward Register with a system-allotted Inward Number for every incoming request, standard objection processing with objection letters sent by speed post or registered post, extra scrutiny by the Team Leader or Management Team for high-value lodgements, and a Document shredding/destruction register for anything shredded, only after the client company's written approval.
The workbook does not attach a rupee threshold or a specific process step to the maker-checker rule itself — it is stated as a general control that applies across the RTA's document processing, not tied to one particular type of request.
A worked example
An RTA is working through a batch of 480 bank-detail change requests ahead of a dividend payout. The maker — one employee — enters the new IFSC and account number for each folio after checking the signature on file, including Folio No. RC-08823, for Mrs. Iyer's 1,200 shares of Ratnagiri Chemicals Ltd.
Before any of these 480 changes takes effect, a second employee, the checker, independently reviews the same supporting documents against each entry made. For Folio No. RC-08823, the checker finds the account number entered does not match the cancelled cheque submitted, and stops that one change — the RTA had been about to redirect a pending dividend of Rs 3,600 to the wrong account. The other 479 entries, matching their supporting documents, are released.
Why NISM asks about it
Chapter 15, section 15.4.1 (Basic Rules as per SOP). Expect a straightforward recall question on what the maker-checker concept requires — a second person verifying what the first processed — rather than a numeric one, since the workbook gives no figures attached to this control.
Common exam traps
- The workbook gives no threshold value or specific transaction type for when maker-checker applies — treat it as a general control across document processing, not a rule triggered only above a certain value.
- Maker-checker is one SOP control among several (Inward Register, objection processing, high-value scrutiny, the shredding register) — do not conflate it with any of the others.
- Documents are shredded only with the client company's written approval, and the destruction itself is logged separately — a different control from maker-checker, even though both appear in the same SOP list.
Check yourself
1.From which discipline does the 'First Time Right' (FTR) concept originate, according to the workbook?
- a)Six Sigma
- b)The SEBI (LODR) Regulations
- c)Know Your Client norms
- d)The maker and checker concept
Show the answer
Answer: (a) Six Sigma
"The concept of ensuring that any procedure/ activity is performed in the right manner, the first time and every time, is referred to as 'First Time Right' (FTR) and originates from Six Sigma."
The workbook's examples: "A customer not requiring to repeat their regular order at the take-away joint" and "A bank executive or an RTA executive handing a customer inquiry and providing correct guidance."
Option B is wrong — LODR comes up in this chapter as a regulation the executive must know before sharing knowledge; it is not where FTR comes from.
Option C is wrong — KYC is part of the SOP's mandatory documents.
Option D is wrong — maker and checker is an SOP rule. It helps get things right, but it is not the source of FTR.
FTR also appears among the Dos: "Ensure that inquiries from investors are adequately and promptly dealt with First Time Right Approach."
2.Under the SOP, what must happen when an objection is raised on a lodged request, and what governs shredding of documents?
- a)The objection is noted internally and documents retained; shredding is at the RTA's discretion
- b)An objection letter is sent to the shareholder with all original documents enclosed by speed post or registered post; documents may be shredded only after written approval from the client company, with entries in the document shredding or destruction register
- c)The request is rejected outright; documents are destroyed immediately
- d)The objection is referred to SEBI; documents are sent to the depository
Show the answer
Answer: (b) An objection letter is sent to the shareholder with all original documents enclosed by speed post or registered post; documents may be shredded only after written approval from the client company, with entries in the document shredding or destruction register
In case of any objection, standard objection processing shall be taken up and an Objection letter shall be sent to the Shareholder with all original documents enclosed through Speed Post or Registered Post.
Originals go back with the letter — the investor is never left without his certificates while an objection stands, and the mode of dispatch is traceable.
Documents required to be shredded only after obtaining written approval from the client company. Entries shall be made in the Document shredding/destruction register while making any request for shredding/destructing the documents.
Two safeguards — written approval from the client, and a register entry.
Which disposes of options A and C. Neither retention without informing the shareholder nor destruction at will is permitted.
Option D misplaces both functions. SEBI is not a first-instance objection forum, and the depository has no role in a physical service request.
The other SOP rules complete the picture. All incoming requests must be Inwarded and verified during the Inwarding Process. A separate Inward Number must be allotted by the System for the Transaction. There shall be a maker and checker concept. High-value lodgements shall be sorted separately and first verified by the Team Leader/ Management Team. KYC means PAN card for identity proof and Self-attested copy of Aadhaar card/ Passport/ Driving license for address proof and utility bills, not older than 3 months. Documents must be processed with the prescribed time limits of various regulatory requirements and client requirements and stored under lock and key.
Chapter 12 shows the same discipline elsewhere — certificates shredded after the specific retention period, with details entered in the Register of Destroyed Certificates.
And Chapter 13's protection for investors applies to the objection itself — discrepancies must be given in one go.
Where this is taught
Free preparation for NISM Series II-ARelated terms
- Complaint Registration NumberThe unique number generated the moment an RTA registers an investor complaint, sent to the complainant's email and mobile — the entry point into a grievance process with fixed timelines up to arbitration.
- Qualified RTAA registrar servicing more than two crore folios — treated by SEBI as a Critical Infrastructure Institution and held to enhanced monitoring, reporting and business continuity requirements.
- Register of Destroyed CertificatesThe RTA's record of every physical share certificate it has shredded after dematerialisation — the workbook requires the entry but does not state how long the certificates must be kept before destruction.
- Unified RegistrationThe single SEBI certificate, under the RTA Regulations, 2025, that lets one entity act both as Registrar to an Issue and as Share Transfer Agent — replacing the old category-wise registration.