The Board (SEBI), on March 28, 2018, decided that except in case of transmission or transposition of securities, requests for effecting the 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 the transfer of shares of listed companies can be done only in the dematerialized 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 the transfer of shares of listed companies only in dematerialized form to 1 April.
Now, it has been decided not to extend the deadline.
The decision that the 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 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:
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.
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.
The transfer deed(s) once lodged prior to the deadline and returned due to the 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 the name of shareholders) cases," the release said.
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