Executive Summary:
This SEBI circular outlines operational guidelines for the transfer and dematerialization of relodged physical shares, following the cutoff date of March 31, 2021, for relodgment requests. It details the process for crediting transferred shares into investors' demat accounts and specifies actions for RTAs, investors, and depositories. A key deadline is the 90-day window for investors to submit demat requests after receiving a Letter of Confirmation.
Key Points / Main Content:
* **Transfer and Dematerialization Process:**
* RTAs must retain physical shares after processing transfer requests and send a Letter of Confirmation to the investor, containing necessary demat request details via registered post/speed post or digitally signed email.
* Investors have 90 days from the Letter of Confirmation issue date to submit a demat request to their Depository Participant (DP), including the Letter of Confirmation.
* RTAs must send a reminder to investors after 60 days of issuing the Letter of Confirmation.
* DPs will process Demat Requests based on the Letter of Confirmation.
* A suggested format for the Letter of Confirmation is provided in Annexure A.
* **Lock-in Provisions:**
* For shares subject to lock-in periods per SEBI regulations, RTAs must inform the Depository about the lock-in and its duration.
* These shares will be in lock-in demat mode for six months from the transfer registration date.
* **Non-Receipt of Demat Request:**
* If a demat request isn't received within 90 days of the Letter of Confirmation, shares will be credited to the Company's Suspense Escrow Demat Account.
* **Depositories' Responsibilities:**
* Amend relevant byelaws, rules, and regulations for implementing these directions.
* Inform participants of the circular's provisions and disseminate it on their websites.
* **Stock Exchanges' Responsibilities:**
* Inform listed companies of the circular's provisions and disseminate it on their websites.
Impact Analysis:
* **Listed Companies:**
* Impact: Need to be aware of and comply with the new guidelines for handling relodged physical shares, including the crediting of shares to a Suspense Escrow Demat Account in case of non-receipt of demat requests.
* Action Required: Ensure RTAs follow the specified procedures and inform investors about the dematerialization process.
* **Registrars to an Issue and Share Transfer Agents (RTAs):**
* Impact: Must adhere to the new operational guidelines for processing transfer requests, issuing Letters of Confirmation, and handling dematerialization requests.
* Action Required: Implement the outlined procedures, including retaining physical shares, sending Letters of Confirmation and reminders, and coordinating with DPs and Depositories.
* **Depositories:**
* Impact: Required to update their systems and regulations to accommodate the new dematerialization process for relodged physical shares.
* Action Required: Amend byelaws, rules, and regulations, inform participants, and disseminate the circular on their websites.
* **Depository Participants (DPs):**
* Impact: Need to process demat requests based on the Letter of Confirmation from the RTA.
* Action Required: Adjust processes to accept Letters of Confirmation as valid proof of holding for dematerialization requests and facilitate investor dematerialization requests within the stipulated timeframe.
* **Investors:**
* Impact: Subject to a defined process and timeline for dematerializing relodged physical shares.
* Action Required: Submit demat requests to their DPs within 90 days of receiving the Letter of Confirmation from the RTA, and be aware of the potential for shares to be transferred to a Suspense Escrow Demat Account if they fail to do so.
* **Recognized Stock Exchanges:**
* Impact: Responsible for ensuring listed companies are aware of the new guidelines.
* Action Required: Inform listed companies of the circular's provisions and disseminate it on their websites.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): A regulatory body for the securities market in India. SEBI issued the circulars mentioned in the document.
Registrars to an Issue Share Transfer Agents (RTA): Entities involved in processing share transfers and maintaining shareholder records.
Depositories: Organizations that hold securities in electronic form.
Recognized Stock Exchanges: Stock exchanges recognized by SEBI in India.
Depository Participants (DP): Agents of depositories who provide services to investors.
SEBIHOMIRSDRTAMBCIRP2020166: SEBI circular dated September 07, 2020, regarding the cutoff date for relodgment of transfer requests.
SEBIHOMIRSDDOS3CIRP2018139: SEBI circular dated November 06, 2018, related to lock-in periods for shares.
Securities and Exchange Board of India Act, 1992: The act under which SEBI derives its powers.
CIRCULAR
SEBI/HO/MIRSD/RTAMB/CIR/P/2020/236 December 02, 2020
To
All Listed Companies (through Stock Exchanges)
All Registrars to an Issue & Share Transfer Agents (RTA)
All Depositories
All Recognized Stock Exchanges
All Depository Participants (DP)
Dear Sir/ Madam,
Sub: Operational guidelines for Transfer and Dematerialization of re-lodged
physical shares
1. SEBI, vide circular no. SEBI/HO/MIRSD/RTAMB/CIR/P/2020/166 dated September
07, 2020, has fixed March 31, 2021 as the cut-off date for re-lodgment of transfer
requests and has stipulated that such transferred shares shall be issued only in
demat mode.
2. In this regard the operational guidelines for crediting the transferred shares into the
respective demat account of the investor, with inputs from stakeholders, are as
under;
i. Guidelines to credit the transferred physical shares in demat mode:
a. Subsequent to processing of the re-lodged transfer request, the RTA shall
retain the physical shares and intimate the investor (transferee) about the
execution of transfer through Letter of Confirmation. This letter shall be sent
through Registered / Speed Post or through email with digitally signed letter
Page 1 of 3and shall, inter-alia, contain details of endorsement, shares, folio of investor
(required on Demat request form) as available on the physical shares.
b. The investor shall submit the demat request, within 90 days of issue of Letter
of Confirmation, to Depository participant (DP) along with the Letter of
Confirmation. RTA shall also issue a reminder at the end of 60 days of issue
of Letter of Confirmation, informing the investor to submit the demat request
as above.
c. Depository Participant will process the Demat Request on the basis of Letter
of Confirmation, as this letter is a confirmation of holding of physical shares
on behalf of the investor by RTA.
d. The suggested format of the Letter of Confirmation is given at Annexure - A.
ii. In case of the shares that are required to be locked-in as per the SEBI Circular
SEBI/HO/MIRSD/DOS3/CIR/P/2018/139, dated November 06, 2018, the RTA
while approving / confirming the demat request, shall also incorporate / intimate
the Depository about the lock-in and its period. Such shares shall be in lock-in
demat mode for 6 months from the date of registration of transfer.
iii. In case of non-receipt of demat request from the investor within 90 days of the
date of Letter of Confirmation, the shares will be credited to Suspense Escrow
Demat Account of the Company.
3. Depositories shall;
a) make necessary amendments to the relevant byelaws, rules and regulations
for the implementation of the above directions, as may be applicable; and
b) bring the provisions of this circular to the notice of their participants and also
disseminate the same on their websites.
Page 2 of 34. 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.
5. The Stock Exchanges are advised to bring the provisions of this circular to the notice
of listed companies and also to disseminate the same on their websites.
Yours faithfully
Deepak Trivedi
Chief General Manager
Tel. no: 022-26449753
Email id: dtrivedi@sebi.gov.in
Page 3 of 3Annexure A
(to SEBI/HO/MIRSD/RTAMB/CIR/P/2020/236, Dated December 02, 2020)
RTA / ISSUER COMPANY ADDRESS
Name: Date:
Address:
Dear Sir/Madam,
CONFIRMATION LETTER
Sub: Transfer of Shares
Name of the Company:
We refer to the request received from you for transfer of the subject shares in your name. We would like to inform you
that the transfer of shares has been approved as detailed below:
Name of first holder & PAN
Joint holder 1 & PAN
Joint holder 2 & PAN
Number of shares
Folio Number
Certificate numbers
Distinctive numbers
Lock-In Yes or No.
If yes, lock-in from dd.mm.yyyy till dd.mm.yyyy
As you may be aware, SEBI vide their Circular No. SEBI/HO/MIRSD/RTAMB/CIR/P/2020/166 September 07, 2020 has
mandated that the shares that are re-lodged for transfer shall henceforth be issued only in demat mode and hence the
duly endorsed original certificates are retained at our end.
Accordingly, within 90 days of this letter, please request your Depository Participant (DP) to demat these shares using
the Dematerialization Request Form (DRF). Please fill it up with the details mentioned in this letter, sign it and present
this letter in original to your DP along with the DRF for enabling your DP to raise a Demat Request Number (DRN). In
case you do not have a demat account, kindly open one with any DP. Please note that you can open Basic Service
Demat Account at minimal / nil charges.
Please note that this letter is valid only for a period of 90 days from the date of its issue within which time you have to
raise demat request with the DP as above. Any request for demat processing after this date will not be entertained and
as per the operating guidelines issued by SEBI, the subject shares shall be transferred to a Suspense Escrow Demat
Account of the company.
Further, please note that in terms of SEBI Circular No. SEBI/HO/MIRSD/DOS3/CIR/P/2018/139 dated November 06,
2018 the above transfer of shares is / are approved with a lock-in period of six months from the date of transfer and
shall remain in lock-in till dd.mm.yyyy, even after dematerialization. [STRIKE OFF IF NOT APPLICABLE].
Thanking you,
Yours faithfully,
For ABCD Limited (RTA)
Authorised Signatory