As we are aware w.e.f. December 5, 2018, securities of Listed entities can be transferred only in Demat form i.e. transfer of securities of listed entities in physical mode will not be allowed. Further, in terms of SEBI (LODR) Regulations, 2015 PAN Nos. of both transferor as well as transferee is required for effecting registration of transfer of securities. However, Companies and RTA were facing many practical issues in implementing these provisions.
In continuation of its earlier Circular, SEBI now, vide it’scircular dated November 06, 2018 has issued Standardised Norms for Transfer of Securities in physical mode and for certain cases wherein PAN is not available. Gist of different scenarios envisaged and the documents required from transferor/transferee in each scenario have been briefed below:
| S.No. | CASES | SOLUTION/PROCEDURE |
| 1. | Where the PAN of Transferor is not available and Transfer deeds were executed prior to notification date of LODR (i.e. December 01, 2015). | Through this circular it has been clarified that in respect of transfer deeds executed prior to notification of LODR (i.e. December 1, 2015), the same may be registered with or without the PAN of the transferor as per the requirement of quoting PAN under the applicable Income Tax Rules. |
| 2. | In case of Mismatch of name in PAN card vis-Ã -vis name on share certificate/ transfer deed. | Any of the following documents may be submitted with explanation of difference in name:
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| 3. | Major mismatch / Non-availability of transferor’s signature | In terms of SEBI (LODR) Regulations, 2015, in cases of major mismatch/ non availability of transferor’s signatures, following documents are  required from the transferor and transferee for effecting transfer:
Now, as per the above mentioned Circular, if the requisite information is provided, then the Company will tally with the records submitted by transfereor/ transferee with the records available and process the request for transfer and if information is not provided the following additional procedure has now been mandated:
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| 4. | Non-availability of any document required for transfer and the transferor is not cooperating or not traceable: | The companies/ RTA shall register the transfer by following the procedure as specified in Case 3 above. |
| 5. | If the address as available with the company does not match with the current address attested by the bank. | Companies/RTA shall register the transfer 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. |
For copy of Circular Click here
CP Comments:
Shareholders/ the investor community had been facing many a practical issues in arranging for PANs/ correct signatures of the Transferors. SEBI, vide this Circular has provided a respite to the investors stuck in these kinds of situations such as not having PAN card of the transferor of share; issues relating to mismatch of name in PAN card vis-Ã -vis name on share certificate / transfer deed; and major mismatch / non-availability of transferor’s signature.
SEBI, by simplifying the norms for transfer of securities in physical mode, has given a second chance to the investors to give effect to the share transfer deed(s)executed before December 01, 2015, which were earlier rejected on account of Non- availability of PAN of the transferor(s). Furthermore, this will also assist the Listed entities in providing the corrected list of their shareholders to the Regulators. In many such situations, old share transfer deeds are lying un- effected with the RTA and the Transferor, having already signed the Transfer Deed (and unaware of such rejection) has striked off such investments from its portfolio and in its books of accounts. However, their names continue to appear in the Company’s record/ register of members.