SEBI has issued a circular on Standardised norms for transfer of securities in physical mode on 6th November, 2018. RTAs seek various documents for effecting transfer of securities and there are variations in process which creates difficulties for transferees. Registrars Association of India (RAIN) submitted a standardised procedure for transfer of securities in physical mode and SEBI after examination issued circular to modify the process.
Following Modifications have been done:
- Transfer deeds executed prior to notification of LODR (1st December, 2015) may be registered with or without the PAN of the transferor.
- If there is a mismatch of name in PAN card and share
certificate/ transfer deed, : In such cases, any of the four additional documents has to be submitted: i. Copy of Passport; ii. Copy of legally recognized Marriage Certificate; iii. Copy of gazette notification regarding change in name; iv. Copy of Aadhar Card. - Major mismatch / Non-availability of transferor’s signature:
As per LODR, in case of non-availability / major mismatch in transferor’s signature, the transferor is required to update his/ her signature by submitting bank attested signature along with an affidavit and cancelled cheque to the RTA/company. In many cases, transferors do not take efforts to do that.
Issuers / RTAs are required to make efforts to contact the transferor by checking the Dividend history and obtaining the current contact details from the bank where dividend was encashed or from the address, email ids and phone numbers, if any, available with the Depositories/KRA.
In case of non- delivery of the objection memo to the transferor or non-cooperation by / inability of the transferor to provide the required details to the transferee, company / RTA shall register as per following procedure:
Step 1. Additional documents shall be collected from
the transferee:
i. An indemnity bond in the format placed at Annexure A;
ii. Copy of address proof – Passport / Aadhar Card /Driving License.
iii. An undertaking that the transferee will not transfer/demat the physical securities until the lock-in period specified under clause (4) below is completed.
RTA may also verify the documents submitted by the transferee with the KYC details, if any, available with the Depositories/ KRAs.
Step 2. Companies / RTAs shall publish an advertisement in at least one English language national daily newspaper and in one regional language daily newspaper published in the place of registered office of the listed entity, giving notice of the proposed transfer and seeking objection, if any, to the same within a period of 30 days. A copy of the advertisement shall also
be published on the company’s website.
Step 3. After expiry of 30 days, transfer shall be effected. The securities so
transferred shall bear a stamp affixed by the company /RTA stating that these securities shall be under lock-in for a period of 6 months from the date of registration of transfer.
Step 4. Names of the transferor, transferee and no. of securities transferred under this procedure shall be disclosed on the company’s website for a period of 6 months from the date of transfer. This information shall also be displayed
on stock exchange website as a corporate announcement.
This procedure shall also be followed in case of non-availability of any document required for transfer and the transferor is not cooperating or not traceable.
If, the address of the transferor submitted in the bank attestation does not match with the address recorded in the records of the company/RTA, transfer shall be registered by updating the new address as attested by the bank. Further, an intimation may also be sent by the RTA with regard to updation of address on the old and new address of the transferor.
