Sebi. (Photo: Kamlesh Pednekar)
Transfer of shares of listed companies has to essentially be in dematerialised mode from December 5, according to markets regulator Sebi.
In a recent notification, the regulator announced the amendment to the LODR (Listing Obligations and Disclosure Requirements) Regulations pertaining to share transfer agent.
At present, as per the LODR Regulations, a listed entity has to ensure that "all activities in relation to both physical and electronic share transfer facility are maintained either in house or by the registrar to an issue and share transfer agent registered with the board (Sebi)".
According to the notification, in the LODR Regulations the words "both physical and electronic" should be omitted.
Besides, there would be an amendment to the regulation dealing with transfer or transmission or transposition of securities.
Following the amendment, requests for effecting transfer of securities should not be processed unless the same are held in the dematerialised form with a depository, except in case of their transmission or transposition.
The fresh regulations would come into force from December 5, the Securities and Exchange Board of India (Sebi) said.
Shares in the demat form will help in having a transparent record of shareholding at companies amid rising concerns over beneficial ownership of entities.