Mittal Court, A Wing, Gr. Floor,
224, Nariman Point, Mumbai 400 021

April 9, 1999

The President/Executive Director
Managing Director of all the Stock Exchanges/

Dear Sir,

Trading and settlement of trades in dematerialised securities

Please refer to our earlier circulars on the subject wherein we have advised list of scrips for delivery by all investors in dematerialised form.

Dematerialised trading in the eligible securities, by eliminating physical paper has helped in reducing the work on the clearing houses and on the Registrar to an Issue & Share Transfer Agents. This would help the market and the investors, as it is now possible to bring about a reduction in the no-delivery period during book-closure and record date. This reduction would improve the liquidity in the market. Accordingly, after a meeting with the representatives of stock exchanges, depositories and Registrars to an Issue and Share Transfer Agents, the following decisions have been taken. You are advised to implement the decisions immediately and to carry out consequential amendments in bye-laws and listing agreement wherever necessary.

In respect of the scrips for which delivery by all investors has been made compulsory in dematerialised form, minimum gap between the date of book-closure and the date of pay-out, including the auction pay-out shall be five calendar days. This would help reducing the no delivery period at least by one week. This would be applicable in those Exchanges which have or will establish connectivity with the Depositories.
According to the existing provisions of the listing agreement, listed companies have to give prior intimation of 42 days to the stock exchanges, about its book-closure / record date. In view of the dematerialisation of securities, it has been decided that such notice period be reduced from 42 days to 30 days. This shall be applicable to all the stock exchanges.

In case of objections received from companies, on account of signature difference, the investors will be given one-time opportunity to rectify or replace with physical shares till 90 days for those scrips which are compulsorily required to be delivered in dematerialised form by all investors. The period of 90 days will be reckoned from the date from which that scrip comes under the mandatory list for delivery in dematerialised form.
It is further clarified that the above decisions are applicable only to such securities which are announced by SEBI from time to time for compulsory delivery in dematerialised form by all investors.

Yours faithfully,
Division Chief
Secondary Market, Depository,
Research & Publications Department

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