The market watchdog SEBI on Friday said that its new notification allows investors to continue maintaining shares in physical form even after December 5. In a statement, the Securities and Exchange Board of India said, “The new amendment does not prohibit investors from holding shares in the physical form. Investors have the option of holding shares in the physical form even after December 5, 2018”.
Earlier in July, the regulator notified that the transfer of securities of listed companies has to take place in dematerialized or electronic mode from December 5. But the recent clarification comes up after the watchdog was reached out by several stakeholders in respect of the applicability of this directive.
Sebi favored dematerialisation of shares over physical form as it helps in maintaining a transparent record of shareholding at listed companies.
It is to be noted that the new rules is not applicable in case of transfer of title of securities due to succession or inheritance and interchanging of the order of the name of shareholders. Also, the regulator clarified that any investor intending to transfer shares which are held in physical form after December 5 can do so after they are converted into demat form.
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