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[SEBI] Transfer of securities in Demat form / holding shares in physical form

Aug 10, 2018: SEBI has informed/clarified the followings regarding the Amendment to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandating transfer of securities in dematerialized form with a depository.

SEBI amended Regulation 40 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 wherein it was intimated that transfer of securities shall not be processed unless the securities are held in the dematerialized form with a depository with effect from December 5, 2018.

Pursuant to the amendment, several initiatives were taken by SEBI to spread awareness about the proposed change.  Listed companies, Depositories and Exchanges have been advised to take special efforts to reach out to the investors holding physical securities. However, SEBI keeps receiving several calls and/or emails concerning the applicability of the amendment.

In view of the above, the following is hereby clarified:

a. The amendment does not prohibit the investor from holding the shares in physical form, investor has the option of holding shares in physical form even after December 5, 2018.

b. The amendment is not applicable for transmission (i.e. transfer of title of shares by way of inheritance / succession) and transposition (i.e. re arrangement / interchanging of the order of name of shareholders) cases.

c. Any investor who is desirous of transferring shares (which are held in physical form) after December 5, 2018 can do so only after the shares are dematerialized.



Source: Securities and Exchange Board of India (SEBI)

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