Shares in demat form must for processing investors’ service requests: Sebi
New Delhi, January 25
With an aim to enhance ease of dealing in securities markets, Sebi on Tuesday said listed companies will issue the securities in dematerialised form only while processing the service request from investors.
Also, the regulator has put in place operational guidelines for dematerialisation of securities while processing investor’s service request.
As an on-going measure to enhance ease of dealing in securities markets by investors, it has been decided that listed companies will henceforth issue the securities in dematerialised form only while processing certain service request, Sebi said in a circular.
These request from investors include issue of duplicate securities certificate, claim from unclaimed suspense account, renewal/exchange of securities certificate, endorsement, splitting of securities certificate, consolidation of securities certificates or folios, transmission and transposition.
Sebi said securities holder/claimant will have to submit a form — to be hosted on the website of the issuer companies and the RTAs (Registrars to an issue and share Transfer Agents) — as per the format specified by the regulator along with necessary documents.
The RTA/issuer companies will have to verify and process the service requests and thereafter issue a ‘Letter of Confirmation’ in lieu of physical securities certificate(s), to the securities holder or claimant within 30 days of its receipt of such request after removing objections, if any.
The ‘Letter of Confirmation’ will be valid for a period of 120 days from the date of its issuance, within which the securities holder/claimant will have to make a request to the depository participant for dematerialising the said securities.
The RTA/issuer companies will have to issue a reminder after the end of 45 days and 90 days from the date of issuance of Letter of Confirmation, informing the securities holder/claimant to submit the demat request, in case no such request has been received by the RTA/issuer company.
In case the securities holder/claimant fails to submit the demat request within this period, RTA/issuer companies will have to credit the securities to the suspense escrow demat account of the company.
In a notification on Monday, Sebi said that requests for effecting transfer of securities will not be processed unless the securities are held in the dematerialised form with a depository.
“Transmission or transposition of securities held in physical or dematerialised form shall be effected only in dematerialised form,” the regulator said.
The move will improve ease, convenience and safety of transactions for investors. To give this effect Sebi has amended Listing of Obligations and Disclosure Requirements (LODR) Regulations.
