As part of strengthening the due diligence for Dematerialization of Physical Securities, the market regulator Securities and Exchange Board of India (SEBI) on November 5 asked listed companies to compile and submit data about shareholders holding shares in physical form to depositories by December 31, 2019
Companies or their RTA (Registrar & Transfer Agent) to provide a static database of their members to depositories:
All listed companies or their RTAs shall provide the following data (static database) of their members holding shares in a physical mode as on 31st March 2019 in a format which will be jointly decided by NSDL and CDSL
- the name of shareholders
- folio numbers
- certificate numbers
- distinctive numbers
- PAN etc
The deadline set by SEBI to provide the above information is December 31, 2019
Due Diligence process to be adopted by Depositories :
- Depositories have to put in place systems to validate any dematerialization request received after December 31, 2019
- After December 31st, 2019, each DRN request will be validated against the Demat account holders' names as available in the records of the depositories.
Depository system to generate flag/alert in case of any normal mismatch in Physical certificate:
- Any minor change in physical certificate name and demat account name depository system will generate a flag
- the following additional documents explaining the difference in name shall be sought,
- Copy of Aadhar Card
- Copy of Passport
- Copy of legally recognized marriage certificate
- Copy of gazette notification regarding change in name
In case of complete mismatch the applicant to approach issuer company or RTA :
If there is a complete mismatch the applicant can approach the issuer company or the RTA for establishing his or her ownership.
This welcome move by SEBI will ensure full-proof ownership of shares to the legal owner of those physical shares.