Transfer of Securities of Listed Companies only in Demat Form – SEBI Clarification

The Board (SEBI), on March 28, 2018, decided 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 dematerialized form with a depository. This measure shall come into effect from April 01, 2019.

SEBI on March 27, 2019 said transfer of shares of listed companies can be done only in the dematerialised form from 1 April but investors are not barred from holding shares in the physical form.

In December 2018, the watchdog extended the deadline for transfer of shares of listed companies only in dematerialised form to 1 April. Read-  Transfer of securities in demat form- Deadline extended till 01.04.2019

Now, it has been decided not to extend the deadline.

The decision that transfer of shares has to be compulsorily in demat form was taken back in March 2018. But in a release on March 27, 2019, SEBI said the measure would be come into effect from April 1, 2019.

Shares in the demat form would help in maintaining a transparent record of shareholding at companies amid rising concerns over beneficial ownership of entities.

Subsequently, SEBI has received representations from shareholders for extension of the date of compliance. In view of the same, the following are hereby clarified:

1. The above decision does not prohibit the investor from holding the shares in physical form; investor has the option of holding shares in physical form even after April 01, 2019.

2. Any investor who is desirous of transferring shares (which are held in physical form) after April 01, 2019 can do so only after the shares are dematerialized.

3. The transfer deed(s) once lodged prior to deadline and returned due to deficiency in the document may be re-lodged for transfer even after the deadline of April 01, 2019.

The decision “is not applicable for demat of shares, transmission (i.e. transfer of title of shares by way of inheritance/ succession) and transposition (i.e. re-arrangement/ interchanging of the order of name of shareholders) cases,” the release said.

Securities and Exchange Board of India

Mar 27, 2019

PR No.: 12/2019

Transfer of securities held in physical mode – clarification  

The Board, on March 28, 2018, decided 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 dematerialized form with a depository. This measure shall come into effect from April 01, 2019.

Subsequently, SEBI has received representations from shareholders for extension of the date of compliance. In view of the same, the following are hereby clarified:

1. The above decision does not prohibit the investor from holding the shares in physical form; investor has the option of holding shares in physical form even after April 01, 2019.

2. Any investor who is desirous of transferring shares (which are held in physical form) after April 01, 2019 can do so only after the shares are dematerialized.

3. The transfer deed(s) once lodged prior to deadline and returned due to deficiency in the document may be re-lodged for transfer even after the deadline of April 01, 2019.

The above Board decision is not applicable for demat of shares, transmission (i.e. transfer of title of shares by way of inheritance / succession) and transposition (i.e. re-arrangement / interchanging of the order of name of shareholders) cases.

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