Sebi asks promoters of all listed firms to dematerialise hol

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The Securities and Exchange Board of India (Sebi) has made it mandatory for promoters of all listed companies to hold shares in the demat form only. Companies will have to comply with the new norms before the end of September.According to data, promoters of 2,644, or nearly 50 per cent listed companies, still hold shares in physical form. Of these, promoters of around 650 companies hold their entire stake in physical form. Such companies where promoters’ holding is in physical form include Hindustan Unilever, BHEL and MTNL, among others.According to shareholding pattern till quarter ended March 2011, companies where some shares are in physical form include Dabur, Reliance Industries, Reliance Infrastructure, Reliance Communication, Reliance Power, Gammon Infrastructure, Jaypee Infratec and Cairn India, among others.The scrips of those companies that fail to comply with the new norms would be put under surveliance in the trade-to-trade segment. Under this, only delivery-based trading can be done and stock will be closely monitored by exchanges.

 

Sebi said the norms were introduced to “further promote dematerialisation of securities, encourage orderly development of the securities market and to improve transparency in the dealings of shares, including the pledge or use as collateral, by promoters”.Market players say the move could bring in more transparency. Share demat was mainly introduced to curb the menace of duplication of shares and fraud entries. Also, duplicate entries of shares of some of the largest private sector companies were found by the regulator in the past before the demat regime was introduced in the domestic markets.Ambareesh Baliga, chief operating officer, Way2Wealth, said: “Companies never bothered to convert their shares in the dematerialised form. Now, they will have to do it. However, it won’t have any impact from the business point of view. From the revenue perspective, there may be an increase for a month, as there are charges involved.”

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The Securities and Exchange Board of India (Sebi) has asked the promoters of listed companies to convert their entire equity holding in the dematerialised form by September 2011, failing which it will ban trading of such shares in the normal segment of the market. “The securities of companies shall be traded in the normal segment of the exchange if and only if, the company has achieved 100 per cent of promoter’s and promoter group’s shareholding in dematerialised form latest by the quarter ended September 2011,” Sebi said in a circular. It further said trading of shares of those companies, which do not satisfy the criteria of 100 per cent dematerialising of equity of promoters, will be allowed for trading under the ‘trade segment’ instead of ‘normal segment’. According to the Sebi, this was being done to promote dematerialisation of securities, encourage orderly development of the securities market and improve transparency in the dealings of shares by promoters including pledge or usage as collateral. Under the ‘trade segment’, it is mandatory to take delivery of shares and most companies prefer to get their equities traded under the ‘normal segment’. “Promoter holdings in many small and medium companies are still in the physical form. The Sebi action seems to be aimed at curbing manipulation in shares by promoters who hold shares in the physical form,” said a dealer. In September last year, Sebi said that only shares of those companies would be allowed to trade in the normal segment where at least 50 per cent of non-promoters holdings are in the dematerialised form by October 31. - www.financialexpress.com

Dear anthony

i have a doubt

Issue of shares in DEMAT Form - In the case of Listed Companies, is it mandatory or not.
Please clarify my doubt with proof

pleasr give me a proof, like any circular notification etc....

reply asap

 


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