Issue of shares in demat form

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A company entered into a tripartite agreement for dematerialisation but subsequently issued physical shares. SEBI regulations state that listed company shares cannot be transferred in physical form, either on-exchange or off-market, after March 31st. While physical copies of share certificates can be provided by the depository upon request, the shares themselves are fungible in demat form and lack distinctive numbers.

soundarya

soundarya (Querist)

07 May 2020 A company has entered into tripartite agreement with depositary and RTA for demat. But it has issued physical shares after that. Is that possible?

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

08 May 2020 According to Sebi, no transaction for transfer of securities of a listed company, at a stock exchange or an off-market transactions between buyers and sellers, can happen in physical certificate form. So, all shares held in physical after March 31 will become illiquid except for transmission and transposition

c.bakshi

c.bakshi (Expert)

08 May 2020 IF ANY SHAREHOLDER REQUEST FOR A COPY OF PHYSICAL SHARES CERTIFICATE IN THAT CASE, THE DEPOSITORY THROUGH DP CAN PROVIDE PHYSICAL COPY OF SHARES. HOWEVER, THE SHARES UNDER THE DEPOSITORY MODE ARE FUNGIBLE THAT IS IT DO NOT BEAR ANY DISTINCTIVE NO AND LEDGER FOLIO.

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