Shares in demat form: The regulator said the final date has been extended from December 5 after taking into consideration representations from shareholders.
Shares in demat form: Just ahead of the final date to get physical shares of listed companies converted to demat, capital markets regulator Sebi has extended the deadline till next year. The Securities and Exchange Board of India (SEBI) on Monday said the last date for dematerialisation of physical shares has been extended to April 1, 2019. The regulator said the final date has been extended after taking into consideration representations from shareholders. The initial deadline for the dematerialisation of physical shares was December 5.
“The Board, on March 28, 2018, decided that except in case of transmission or transposition of securities, requests for effecting transfer of securities shall not be processed unless the securities are held in the dematerialised form with a depository. This measure was to come into effect from December 5, 2018,” said the statement from the regulator.
“Subsequently, Sebi has received representations from shareholders for extension of the date of compliance. In view of the same, the deadline has been extended and the aforesaid requirement of transfer of securities only in demat form shall now come into force from April 1, 2019,” it added.
In a bid to improve transparency in the dealing of securities, Sebi had in June notified that non-promoter shareholders will have to get their shares converted to demat form by December 5. The move also aimed at avoiding instances of huge frauds in the form of claiming dividends by forged documents. Sebi’s notification had come nearly seven years after it had made dematerialisation of physical shares held by promoters compulsory.
In addition, Sebi had also laid down some standard norms for the transfer of securities into physical mode in a bid to ease the difficulties faced by investors in the transmission process. As the December deadline was drawing closer, market observers were of the view that the physical shares may become illiquid unless there was an extension or any other directive issued by the Sebi for that purpose. “One has to move to the demat regime. There is no alternative unless the date is extended,” Anita Gandhi, Whole Time Director at Arihant Capital Markets, had told FE Online.