SEBI bans physical transfer of shares

SEBI has vide its notification dated june 8, 2018 effectively banned physical transfer of shares. This has been made via an amendment to the Listing Obligations and Disclosure Requirements, Regulations, 2015

Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations, 2018

1.      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. from 5^th Day of December, 2018

2.      Requests for effecting transfer of securities shall not be processed unless the securities are held in the dematerialized form with a depository.

o   This means with effect from 5^th December, 2018 all the securities which are held in physical from shall be prohibited for transfer and shall be required to be done compulsorily in dematerialized form

o   Securities shall only be processed if it is in dematerialized form

*However this shall not affect the transmission or transposition of shares in physical form

3.      With effect of above following shall be omittedfrom Schedule 7 i.e. Transfer of securities

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

4.      With effect of change in regulation 40(1) the following change in 7(2) shall take place:

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

https://www.sebi.gov.in/legal/regulations/jun-2018/securities-and-exchange-board-of-india-listing-obligations-and-disclosure-requirements-fourth-amendment-regulations-2018_39263.html

* with inputs from my team member Amita Jadav.