Securities and Exchange Board of India (SEBI), earlier in 2020, released the operational guidelines to credit the physical share certificates in the Demat account of the investors because of the re-lodged transfer request. Dematerialised shares help maintain transparency regarding the companies’ shareholding amid rising concerns over the beneficial ownership of the entities.
After processing the re-lodged transfer request, the RTA (registrar to an issue and share transfer agent) will retain physical shares and inform the investor ( transferee) about the execution of the transfer through a confirmation letter. This letter will be shared through speed post or email, along with a digitally signed letter with details of endorsement, shares, and a folio of investors available on physical shares.
The investor will have to submit the Demat request within 90 days of the issue of the letter of confirmation to the depository participant along with the letter of confirmation. The depository participant will process the Demat request based on this letter of confirmation.
Thus, this letter is a confirmation of the holding of physical shares on behalf of the investor by the registrar and transfer agent (RTA); if the shares are required to be locked in, the RTA, during the confirmation process, will also inform the depository participant about the mentioned lock-in and the lock-in period. These lock-in shares will be locked in Demat mode for about six months from the date of transfer registration.
In scenarios of non-receipt of a Demat request from the investors within 90 days of the letter of confirmation, the said shares will be credited to the suspense escrow Demat account of the company.
SEBI set March 31, 2021 as the deadline for filing share transfer requests. Thus, with effect from April 1, 2019, the transfer of securities in physical form has been discontinued, but investors are not debarred from holding the shares in physical form.
However, prior to this deadline, SEBI clarified that transfer deeds lodged before the deadline but rejected or returned due to missing documents could be re-lodged with the missing documents.
With SEBI releasing the operational guidelines for transfer and dematerialisation of re-lodged physical shares, investors who were earlier experiencing blockers due to a lack of understanding of the process can easily get their precious physical share certificates dematerialised.
With Rurash’s expert support, you can get your physical shares dematerialised and credited into your Demat account safely, securely, and efficiently. That, too, with minimum intervention and hassle.
Rurash Financials is one of India’s trusted investment management firms, providing financial solutions to augment the client’s wealth and facilitate building a legacy.