Establishment of connectivity with both the Depositories NSDL and CDSL – Companies eligible for shifting from Trade for Trade Settlement (TFTS) to Normal Rolling Settlement
Summary
This circular establishes the procedure for shifting securities from Trade for Trade Settlement (TFTS) to Normal Rolling Settlement. It mandates that companies must establish connectivity with both NSDL and CDSL depositories to become eligible for this shift. Stock exchanges are responsible for verifying connectivity and ensuring at least 50% of non-promoter holdings are dematerialized before approving the transition.
Text
It was prescribed vide SEBI circular no D&CC/FITTC/CIR-05/2001 dated December 26, 2001 that scrips not connected to both Depositories by September 30, 2001 shall be traded on TFTS mode.
Henceforth the following procedure shall be followed for the purpose of shifting of trading in securities from TFTS to Normal Rolling Settlement.
A company, after establishment of connectivity with both the Depositories, shall approach the stock exchange(s) having nationwide terminals for shifting the trading of its securities from TFTS to Rolling settlement.
The stock exchange(s) shall verify the establishment of connectivity of the company with both the Depositories.
The stock exchange upon verification of status of establishment of connectivity by the company with both the Depositories may consider shifting the trading in these securities to Rolling Settlement subject to the following.
At least 50% of other than promoter holdings as per clause 35 of Listing Agreement are in dematerialized mode before shifting the trading in the securities of the company from TFTS to Rolling Settlement.
For this purpose, the companies shall obtain a certificate from its Registrar and Transfer Agent (RTA) and submit the same to the stock exchange/s. However, if an issuer-company does not have a separate RTA, it may obtain a certificate in this regard from a practicing Company Secretary/Chartered Accountant.
There are no other grounds/reasons for continuation of the trading in TFTS.
The stock exchanges shall inform the market of the names of companies which have been shifted from TFTS to Rolling Settlement.
Stock Exchanges are directed to bring the provisions of this circular to the notice of the companies listed on the exchange and also disseminate the same on their website.
This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Establishment of connectivity with both the Depositories NSDL and CDSL – Companies eligible for shifting from Trade for Trade Settlement (TFTS) to Normal Rolling Settlement. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.