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Restriction on Transfer of Shares in Physical form in case of Listed Company : SEBI has amended the listing Obligation and Disclosure Requirements (LODR) regulations. In a new directive, shareholders holding physical share certificates should convert it into dematerialized form by December 5, 2018:-

Notification for same has been issued on The gazette notification was issued on June 8, 2018

Click here to download the Notification

Restriction on Transfer of Shares in Physical form in case of Listed Company

Impact:

The shareholders who continue to hold shares and other types of securities of listed companies in physical form even after 05.12.2018, will not be able to lodge the shares with company / its RTA for further transfer.

Note: Only the requests for transmission and transposition of securities in physical form, will be accepted by the listed companies / their RTAs.

What will happen if I dont demat my physical shares

In this case, Shareholder will not be able to sell or transfer your shares after December 5, 2018. You will have to wait for demat of shares before being able to sell/transfer them.

In case of demise of shareholder holding physical securities, what could be the procedure to transfer those physical securities (nominee registered / nominee not registered)

Transmission and transposition of shares held in paper form will continue to be allowed. Transmission happens upon death of any or all shareholders. Transposition means change in ownership pattern; eg. From combination A & B (in this order) to B & A or from A & B & C to B & A & C. Though these will still be possible in paper form even after Dec. 4, 2018, conversion to demat is still suggested for many other benefits it offers.Issue its securities only in dematerialized form; and

Conclusion

Therefore one can opine that all the securities holder of shares of Listed Companies are required to dematerialized their physical shares before 05.12.2018. After 05.12.2018 share cant be transfer if shall be in physical mode.

(Author CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected]).
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