SEBI Restriction of Transfer of Securities in Physical Form By CS Ravi Garg


Reference: SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) (FOURTH AMENDMENT) REGULATIONS, 2018 

Amendment in Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Click here for SEBI Regulation)


BASICS: NO TRANSFER OF SHARES IN PHYSICAL FORM
               RESTRICTION OF TRANSFER OF SECURITIES IN PHYSICAL FORM-SEBI

EXCEPTION: TRANSMISSION OR TRANSPOSITION OF SECURITIES



Date of Amendment8th June 2018

Effective date: These regulations shall come into force on the one hundred and eightieth day from the date of its publication in the Official Gazette, i.e 04.12.2018

Update 1: Amendment in Regulation 7

Share Transfer Agent.

  1. (1) The listed entity shall appoint a share transfer agent or manage the share transfer facility in-house:

Provided that, in the case of in-house share transfer facility, as and when the total number of holders of securities of the listed entity exceeds one lakh, the listed entity shall either register with the Board as a Category II share transfer agent or appoint Registrar to an issue and share transfer agent registered with the Board.

(2) The listed entity shall ensure that all activities in relation to both physical and electronic (Removed) share transfer facility are maintained either in-house or by Registrar to an issue and share transfer agent registered with the Board.

 

Update 2: Amendment in Regulation 40

Transfer or transmission or transposition of securities.

  1. (1) Save as otherwise specified in provisions of securities laws or Companies Act, 2013 and rules made thereunder, the listed entity shall also comply with the requirements as specified in this regulation for effecting the transfer of securities.

Amendment: “Provided 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 the dematerialized form with a depository.”

Update 3: Amendment in  SCHEDULE VII:

TRANSFER OF SECURITIES

  1. REQUIREMENT OF PAN

 (1) For registration of transfer of securities, the transferee(s), as well as transferor(s), shall furnish a copy of their PAN card to the listed entity for registration of transfer of securities.

 Amendment - Clause omitted:

(2) For securities market transactions and/or for off-market or private transactions involving the transfer of shares in physical form, the transferee(s), as well as transferor(s), shall furnish a copy of PAN card to the listed entity for registration of such transfer of securities. 

Stakeholders:

1. Listed Company having securities in physical form
2. Registrar and Share Transfer Agent
3. Shareholders

Benefits: Estoppel to the fraudulent transaction of shares held in physical form.

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