Standardised norms for transfer of securities in physical mode
Summary
This SEBI circular standardizes the documentation and procedures for transferring securities in physical mode to address investor difficulties. It clarifies requirements for non-available PANs, name mismatches, and signature issues by referencing specific LODR regulations and RAIN proposals. The document mandates specific verification steps, advertising, and lock-in periods when transferors are uncooperative or untraceable.
Text
Vide Regulation 40 and Schedule VII of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”) SEBI has prescribed requirements for transfer of securities in physical mode.
It is clarified that transfer deeds executed prior to notification of LODR may be registered with or without the PAN of the transferor as per the requirement of quoting PAN under the applicable Income Tax Rules.
In such cases, transfer shall be registered on submission of any of the four following additional documents explaining the difference in names: Copy of Passport; Copy of legally recognized Marriage Certificate; Copy of gazette notification regarding change in name; Copy of Aadhar Card.
RTA/ company shall follow the procedure as laid down in Para (B)(2) of Schedule VII of LODR for major difference or non-availability of signature of the transferor(s).
Issuers / RTAs shall make efforts to contact the transferor : 1. by checking the Dividend history and obtaining the current contact details from the bank where dividend was encashed. 2. from the address, email ids and phone numbers, if any, available with the Depositories/KRA
Following additional documents shall be collected from the transferee: i. An indemnity bond from the transferee in the format placed at Annexure A; ii. Copy of address proof - Passport / Aadhar Card / Driving License of the transferee. iii. An undertaking that the transferee will not transfer/ demat the physical securities until the lock-in period specified under clause (4) below is completed.
RTA may also verify the documents submitted by the transferee with the KYC details, if any, available with the Depositories/ KRAs.
Companies / RTAs shall publish an advertisement in at least one English language national daily newspaper having nationwide circulation and in one regional language daily newspaper published in the place of registered office of the listed entity is situated, giving notice of the proposed transfer and seeking objection, if any, to the same within a period of 30 days from the date of advertisement. A copy of the advertisement shall also be published on the company’s website.
Transfer shall be effected only after the expiry of 30 days from the newspaper advertisement. The securities so transferred shall bear a stamp affixed by the company / RTA stating that these securities shall be under lock-in for a period of 6 months from the date of registration of transfer and should not be transferred / dematerialized during the said period.
Names of the transferor, transferee and no. of securities transferred under this procedure shall be disclosed on the company’s website for a period of 6 months from the date of transfer. This information shall also be displayed on stock exchange website as a corporate announcement;
In case of non-availability of any document required for transfer and the transferor is not cooperating or not traceable, companies/ RTA shall register the transfer by following the procedure as specified in case of major mismatch / non-availability of transferor’s signature, as specified in Para 2(c) above.
Accordingly, in case the bank attested address of the transferor differs from the records available with the company / RTA, companies/ RTAs shall register the transfer by updating the new address as attested by the bank. Further, an intimation may also be sent by the RTA with regard to updation of address on the old and new address of the transferor.
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Source: SecMarx — Standardised norms for transfer of securities in physical mode. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.