Nov 6, 2019

Attention Listed Entities Having Shares in Physical Mode

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We all are aware that transfer of Shares of Listed Company in Physical form is not permissible w.e.f. April 1, 2019. Ever-since then, the only option left with shareholders is to get their shares dematerialized in order to transact in them, in any way.

In light of the above and to augment the integrity of the system in processing of dematerialization request, SEBI vide circular dated November 5, 2019 has directed the Depositories, Listed entities and their RTAs to implement a due diligence process, which is as follows:

  1. Company/ RTA to provide the Static data of members holding shares in physical mode as on March 31, 2019 to the Depositories, including folio numbers, certificate numbers, distinctive numbers, PAN etc.
    • The last date for furnishing the details to the Depositories is December 31, 2019;
    • The format for submitting the details will be communicated to companies and RTA in due course by depositories.
  2. Depositories to capture the relevant details from above collated data and put in place systems to validate any dematerialization requests received after December 31, 2019;
  3. Depositories to generate flags/alert, if name on the share certificate(s) doesn’t match with the name of the beneficial owner of demat account.

    In such cases, following additional documents to be furnished to the depository:

    • Copy of Passport
    • Copy of legally recognized marriage certificate
    • Copy of gazette notification regarding change in name
    • Copy of Aadhar Card

      However, in the case of complete mismatch of name, the applicant may approach the Issuer Company / RTA for establishing his title/ ownership.

  4. Depositories to submit monthly report to SEBI

CP’s Comments:

Imposition of these additional steps would go a long way to curb the malpractices associated with physical share transfer regime. In the past, a lot many irregularities were observed in the physical share transfers and it has always been the Regulators to plug them. The only issue that may need to be addressed is availability with the Company/ RTA of the entire static data in respect of all the physical shareholders.

Click here to download SEBI Circular

For further clarifications or information, you can reach us @

Ms. Anjali Aggarwal

Partner & Head – Capital Market Services

+91 9971673336

+91 11 40622230

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