Restriction on Transfer of Shares in “Physical Shares” – “Listed Company” - Series 399
Restriction on Transfer of Shares in “Physical Shares” – “Listed Company”
SEBI has amended the listing Obligation and Disclosure
Requirements (LODR) regulations. In a new directive, shareholders holding
physical share certificates should convert it into dematerialized form by December 5, 2018:-
Notification for same has been issued on “The gazette
notification was issued on June 8, 2018”
A. Impact:
The shareholders who continue to hold
shares and other types of securities of listed companies in physical form even after 05.12.2018,
will not be able to lodge the shares with company / its RTA for further transfer.
Note: Only
the requests for transmission and transposition of securities in physical form,
will be accepted by the listed companies / their RTAs.
In this case, Shareholder will not be able to sell or transfer your
shares after December 5, 2018. You will have to wait for demat of shares before
being able to sell/transfer them.
Transmission and transposition of shares held in paper form
will continue to be allowed. Transmission happens upon death of any or all
shareholders. Transposition means change in ownership pattern; eg. From
combination A & B (in this order) to B & A or from A & B & C to
B & A & C. Though these will still be possible in paper form even after
Dec. 4, 2018, conversion to demat is still suggested for many other benefits it
offers.Issue its securities only in dematerialized form; and
D. Conclusion:
Therefore one can opine that all the securities holder of
shares of Listed Companies are required to dematerialized their physical shares
before 05.12.2018. After 05.12.2018 share cant be transfer if shall be in
physical mode.
(Author
– CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice
from Delhi and can be contacted at csdiveshgoyal@gmail.com).
Disclaimer:
The
entire contents of this document have been prepared on the basis of relevant
provisions and as per the information existing at the time of the preparation.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore.
Users of this information are expected to refer to the relevant existing
provisions of applicable Laws. The user of the information agrees that the
information is not a professional advice and is subject to change without
notice. I assume no responsibility for the consequences of use of such
information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,
SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH
THE USE OF THE INFORMATION
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