Procedure to be followed by Cos. / STAs
Summary
This section outlines the mandatory procedures for Companies and Share Transfer Agents (STAs) regarding the receipt, scrutiny, and return of share transfer documents. It establishes strict timelines for issuing acknowledgments, handling objections, and transferring shares, while defining specific documentation requirements for various objection scenarios. The text also mandates security measures for certificates, reporting obligations to Stock Exchanges, and dispute resolution mechanisms. Paragraphs 21 through 30 detail the specific documentation required for stop transfer objections and duplicate share issuance, including indemnity bonds and court orders. The text outlines procedural obligations for companies and STAs regarding third-party claims, error rectification within 60 days, and mandatory insurance coverage. Finally, it establishes that non-compliance with these norms subjects entities to disciplinary action by Stock Exchanges or SEBI without invalidating the underlying documents.
Text
The Company / STA shall issue receipt / acknowledgement in the prescribed format... post it to the transferee, latest within 7 working days of its receipt...
The Company / STA shall use the prescribed format of covering letter as per Annexure-2 for returning shares under objection...
Covering letter and Objection memo must be printed on the Letter head / stationery respectively... Objection Memo must bear a unique serial number issued between two book closure dates.
The Company/ STA must affix date receipt stamp of the Company / STA on Transfer Deed/s returned with the objection memo.
The Company / STA shall return the Share Certificate/s and Transfer Deed/s alongwith the objection memo within the prescribed time of 1 month... normally transfer the shares within 7 working days... and in any case within a period not exceeding 30 days.
Any disputes arising out of any matter, and/ or delay relating to registry/ non-registry of transfer... shall be subject to the provisions of Arbitration/ Dispute Resolution mechanisms available with the Stock Exchanges.
The Company / STA shall scrutinise the transfer documents in its totality and send objection memo by marking whatever are the defects observed... advising the transferee/s and / or transferor/s to ensure due rectification...
It shall not be competent for the Company/ STA to raise additional objections on rectified document where the rectification in the manner guided by the Company / STA is carried out... However... if additional facts have emerged... the Company/ STA may reject transfer once again.
Where the Shares Certificates bear fully paid stickers... the company or the STA shall not impound such certificates... The Company/ STA shall proceed to transfer such shares as if ‘fully paid up’.
The Company / STA shall despatch the Share Certificate/s issued under Stockinvest, after realisation of the Stockinvest... list all shares with the Stock Exchanges with the qualification 'all shares despatched except shares allotted under Stockinvest...'
The Company/STA shall ensure to use adequate security marks on the certificates, with stationary control number, approved quality of security paper... in order to detect fake certificates...
Pre-printed uniform format stickers of good quality shall be used by all the Company/ STA for endorsement of allotment / call money payment... The information to be provided on the sticker shall include date, transfer no., folio no., names...
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Source: SecMarx — Procedure to be followed by Cos. / STAs. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.