Still holding Physical Share of Listed Entity!! Please get rid of it before 5th December 2018.
Otherwise You may lose your right to transfer.
On 8th June 2018, SEBI has notified vide Notification No. SEBI/LAD-NRO/GN/2018/24
by issuing SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) (FOURTH AMENDMENT) REGULATIONS, 2018 that except in case of transmission or transposition of securities, requests for effecting transfer of securities shall not be processed unless the securities are held in the dematerialized form with a depository. In other words there will not be any transfer of physical share after 5th December 2018.
SEBI has decided to amend Regulation 40 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) which deals with transfer or transmission or transposition of securities.
According to this amendment, the requests for effecting the transfer of listed securities shall not be processed unless the securities are held in the dematerialized form with a depository. Therefore, for effecting any transfer, the securities shall mandatorily require to be in demat form.
Why this amendment?
To keep a check on the instances of fraudulent transfer and for ensuring more transparency, this amendment has been brought into force. Investors holding physical shares sometime loose track about corporate action such as bonus / dividend due to change in their address and those corporate action remained unclaimed.
Sharepro fiasco is the classic fallout for Investors who were holding physical shares. Recently, Aptech, Britannia Industries ltd, Asian Paints filed a complaint against its share transfer agent Sharepro for illegally transferring dividends and shares to fraudulent accounts.
After effect of the Amendment:
This amendment will bring the followings changes:
Can holder continue to hold shares in Physical form?
Yes, the holder can continue to hold the shares in physical form but one can not transfer the same in physical form.
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