{"id":1918,"date":"2018-07-10T07:00:22","date_gmt":"2018-07-10T07:00:22","guid":{"rendered":"https:\/\/companyregistrationonline.in\/?p=1918"},"modified":"2025-06-27T06:53:54","modified_gmt":"2025-06-27T06:53:54","slug":"sebi-restriction-transfer-physical-share","status":"publish","type":"post","link":"https:\/\/companyregistrationonline.in\/blog\/sebi-restriction-transfer-physical-share\/","title":{"rendered":"SEBI Restriction on Transfer of Physical Share"},"content":{"rendered":"

SEBI made a new notification vide Notification No. SEBI\/LAD-NRO\/ GN\/2018\/24, on 8th June 2018\u00a0 issuing SEBI<\/a><\/strong> (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) (FOURTH AMENDMENT) REGULATIONS, 2018 to regulate the fraudulent transfer of shares. Under the new regulation, it explained that the physical transfer of shares cannot be effected unless the securities are held in the dematerialized form with a depository. Thus requests for effecting the transfer of securities shall not be processed except in case of transmission or transposition of securities. Therefore, it is advisable to get rid of any holding transfer of physical share of Listed Entity before 5th December if the right to transfer needs to be kept intact.<\/p>\n

Now the question arises whether Shares in the physical form be sold in India?<\/strong><\/h2>\n

The answer would be No, as one won’t buy shares in physical format anymore. Thus, to sell the physical shares you need to open a Demat account and convert the shares into a dematerialized format and they can sell those shares through your Demat account. One can sell the physical share through the off-market route but stamp duty would require to be paid.<\/p>\n

Regulation 40 of the SEBI<\/a><\/strong> (Listing Obligations and Disclosure Requirements) Regulation, 2015 deals with the transferor transmission or transposition of securities. This particular rule is amended and according to this amendment, the requests for effecting the transfer of listed securities shall not be processed unless the securities are held in the dematerialized form with a depository. Therefore, for effecting any transfer of shares, the securities shall mandatorily require to be in Demat form.<\/p>\n

If you want to apply for Private Limited Company Registration<\/a><\/strong>, you can go with Company Registration Online<\/a><\/strong>.<\/span><\/p><\/blockquote>\n

Why was this Amendment necessary?<\/strong><\/h3>\n

A classic example of fallout in holding physical shares can be related to the Share fiasco, where recently Aptech, Britannia Industries Ltd, Asian Paints filed a complaint against its share transfer agent Sharepro for illegally transferring dividends and shares to fraudulent accounts.<\/p>\n

Therefore the amendment addresses the following issues with such transfer of shares:<\/p>\n