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DMAT & Transfer of Share

Dear Shareholder(s),

This is to be inform you that with the, 

Amendment to Regulation 40 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 with respect to mandatory dematerialization for transfer of securities

             BSE has issued a Circular to Listed Companies on July 05, 2018   informing about amendment to Regulation 40 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 vide Gazette notification dated June 8, 2018 has mandated that transfer of  securities would be carried out in dematerialized form only.

             With effect from December 5, 2018, it should be ensured that shares which are lodged for transfer shall be in dematerialized form only

Dematerialization

Dematerialization offers flexibility along with security and convenience. Holding share certificates in physical format carried risks like certificate forgeries, loss of important share certificates, and consequent delays in certificate transfers. Dematerialization eliminates these hassles by allowing customers to convert their physical certificates into electronic format. Shares in the electronic format are held in a Demat account. The BSE Ltd has recently, issued a Circular dated July 05, 2018 to all listed Companies, informing about amendment to Regulation 40 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 vide Gazette notification dated June 8, 2018 has mandated that transfer of securities would be carried out in dematerialized form only. A copy of circular is attached as Annexure 1.
All Listed Companies and their Registrars and Transfer Agents (RTAs) are hereby advised that, with effect from December 5, 2018, it should be ensured that shares which are lodged for transfer shall be in dematerialized form only.

 

Process of dematerialization

  • Dematerialization starts with opening a Demat account. For demat account opening, you need to shortlist a Depository Participant (DP) that offers Demat services.
  •  To convert the physical shares into electronic/ demat form, A Dematerialization Request Form (DRF), which is available with the Depository Participant (DP), has to be filled in and deposited along with share certificates. On each share certificate, 'Surrendered for Dematerialization' needs to be mentioned by DP.
  •  The DP needs to process this request and send along with the share certificates to Company’s registrars and transfer agents at their address at M/s. Niche Technologies Private Limited, D-511, Bagree Market, 5th Floor, 71, B.R.B Basu Road, Kolkata- 700001, Phone No. 033-22357270 through the depository.
  •  Once the request is approved, the share certificates in the physical form will be destroyed and a confirmation of dematerialization will be sent to the depository.
  •  The depository will then confirm the dematerialization of shares to the DP. Once this is done, a credit in the holding of shares will reflect in the investor's account electronically.
  •  This cycle generally takes about 21 days after the submission of dematerialization request, provided all documents submitted are in order.
  •  Dematerialization is possible only with a Demat account.

Benefits of dematerialization

  •  It allows you to conveniently manage your shares and transactions from anywhere
  • Stamp duty is not levied on your electronic securities
  • When you open a demat account, it provides paperless transactions of securities.
  • Nominal holding charges are levied.

 

                                                                                                                                                   Annexure 1
LIST/COMP/15/2018-19 July 05, 2018
To
All the Listed Companies,
Dear Sir / Madam,
Subject: Amendment to Regulation 40 of Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 with respect to
mandatory dematerialization for transfer of securities

 

The amendment to Regulation 40 of Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 vide Gazette notification dated
June 8, 2018 has mandated that transfer of securities would be carried out in dematerialized
form only.

Accordingly, Listed Companies and their Registrars and Transfer Agents (RTAs) are hereby
advised that, with effect from December 5, 2018, it should be ensured that shares which
are lodged for transfer shall be in dematerialized form only.

In order to implement the aforementioned Amendment in the Regulation and as advised by
SEBI, all the Listed Companies are hereby directed to carry out the following actions:
1) To take special efforts through their RTAs to send letter under Registered/Speed
post to the holders of physical certificates appraising them about the amendment
and sensitise them about the impact of the regulation on the transfer of shares held
by them in physical form w.e.f December 5, 2018.
2) RTAs may also be advised to send two reminders, preferably at a gap of 30 days, to
such shareholders who continue to hold their shares in physical form, advising them
to get the same dematerialized
3) Listed Companies shall prominently place information on their website intimating
the investors about the proposed change and provide appropriate guidance on how
to dematerialize their shares.
4) Listed companies should ensure that the signature cards of all the holders of
physical securities are handed over to its RTA at the earliest.
All listed companies are requested to take note of above and comply accordingly.
Companies may also report compliance with these requirements by end September 2018 to
the Exchange, in a specified format that will be sent out shortly.
Abhijit Pai                                                                                            Shyam Bhagirath
Dy. Gen. Manager                                                                              Associate Manager
Listing Compliance                                                                           Listing Compliance

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