MUMBAI: The Securities and Exchange Board of India (Sebi) has made holding of shares in dematerialised form compulsory from December, except for those who have inherited the shares as ‘transmission’. However, there have been many hurdles the holders of physical share transfers face, which Sebi has tried to ease through a circular issued on Tuesday.
According to the modified guidelines, the regulator has permitted share transfer even if there has been no PAN number available for transferor if the transfer deeds were executed before December 1, 2015. If there are any mismatch in the name as written in the PAN card and the share certificate or transfer deed, Sebi has allowed transfer if a person is able to prove the name change. They have to submit any of these documents as a proof, passport, marriage certificate, Aadhaar card along with a copy of gazette notification on the name change.
In case of major mismatch or non-availability of transferor’s signature, Sebi said, “Multiple instances have been brought to the notice in such cases, where the transferor did not take efforts to update his signature since he had already received the consideration for the transfer. In many cases, the transferors could not be traced now.”
To solve this, it has said share registrars and transfer agents (RTAs) can check the dividend history and obtain the contact details of the transferor from the bank where dividend was enchased, to get details from the email ids, phone numbers available with the depositaries.
In case of non-delivery of objection memo to the transferor, the RTAs can take either an indemnity bond from the transferee, copy of address proof, an undertaking that the transferee will not transfer/demat the physical securities until the prescribed lock-in is complete. RTAs can also verify the KYC details, companies and RTAs can publish advertisement in at least one English national daily and one regional language daily and effect transfer 30-days after the advertisements are published.
SEBI has also asked for names of transferor, transferee and number of securities transferred be disclosed on the company’s website for a period of six months from the date of transfer. If the transferor’s address as in company/RTA records differ from the address given in bank attestation for transfer purposes, RTAs shall register the transfer by updating the new address as attested by the bank.