Operational guidelines for transfer and dematerialization of re-lodged physical shares- (Securities and Exchange Board of India) (02 Dec 2020)

MANU/SSMD/0071/2020

Capital Market

1. SEBI, vide circular no. SEBI/HO/MIRSD/RTAMB/CIR/P/2020/166 dated September 07, 2020, has fixed March 31, 2021 as the cut-off date for re-lodgment of transfer requests and has stipulated that such transferred shares shall be issued only in demat mode.

2. In this regard the operational guidelines for crediting the transferred shares into the respective demat account of the investor, with inputs from stakeholders, are as under;

i. Guidelines to credit the transferred physical shares in demat mode:

a. Subsequent to processing of the re-lodged transfer request, the RTA shall retain the physical shares and intimate the investor (transferee) about the execution of transfer through Letter of Confirmation. This letter shall be sent through Registered / Speed Post or through email with digitally signed letter and shall, inter-alia, contain details of endorsement, shares, folio of investor (required on Demat request form) as available on the physical shares.

b. The investor shall submit the demat request, within 90 days of issue of Letter of Confirmation, to Depository participant (DP) along with the Letter of Confirmation. RTA shall also issue a reminder at the end of 60 days of issue of Letter of Confirmation, informing the investor to submit the demat request as above.

c. Depository Participant will process the Demat Request on the basis of Letter of Confirmation, as this letter is a confirmation of holding of physical shares on behalf of the investor by RTA.

d. The suggested format of the Letter of Confirmation is given at Annexure - A.

ii. In case of the shares that are required to be locked-in as per the SEBI Circular SEBI/HO/MIRSD/DOS3/CIR/P/2018/139, dated November 06, 2018, the RTA while approving / confirming the demat request, shall also incorporate / intimate the Depository about the lock-in and its period. Such shares shall be in lock-in demat mode for 6 months from the date of registration of transfer.

iii. In case of non-receipt of demat request from the investor within 90 days of the date of Letter of Confirmation, the shares will be credited to Suspense Escrow Demat Account of the Company.

3. Depositories shall;

a) make necessary amendments to the relevant byelaws, rules and regulations for the implementation of the above directions, as may be applicable; and

b) bring the provisions of this circular to the notice of their participants and also disseminate the same on their websites.

4. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

5. The Stock Exchanges are advised to bring the provisions of this circular to the notice of listed companies and also to disseminate the same on their websites.

Tags : OPERATIONAL GUIDELINES TRANSFER SHARES