For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

    Procedure For Transfer Of Demat Shares On Death Now Same As Physical Shares

    |

    The Securities and Exchange Board of India (SEBI) has now made the procedure of transmission of demat shares (transfer of demat shares on the death of the shareholder) same as the transmission of shares in physical form.

    Procedure For Transfer Of Demat Shares On Death Now Same As Physical Shares
     

    In a circular dated 4 January 2019, the capital market regulator SEBI said, it will be harmonising the procedure of transmission of securities in the demat (dematerialised) form with that of the procedure to transmission securities in the physical form. Note that securities in physical mode have to be compulsorily converted into demat by 1 April 2019.

    The transfer of equity shares to the investor's heir upon death was up till now depended on whether the shares were held in the physical or demat form. The transmission of physical shares was governed by the SEBI's Listing Obligations and Disclosure Requirements (LODR) and that of demat shares were governed by the by-laws and rules of the respective depository (NSDL or CSDL).

    Heading towards full dematerialization of shares held by investors this April, any form of securities will follow the guidelines of the LODR (Sixth Amendment) Regulations, 2018.

    How will affect the transmission of shares here on?

    Since all the shares will soon be held in demat form, the tightening of the transmission procedure was due. However, if there is no mentioned nomination or a will, the transfer to a legal heir may get cumbersome. It is time to get yourself familiar with the procedure of transmission under LODR regulations.

    The SEBI LODR regulations pass the ownership of jointly held physical shares to the surviving holder of the joint securities. Transmission of shares held by singularly by investors depended on whether the investor has a made a nomination or not and if there is a will, succession certificate or letter of administration.

    The nominee of such shares has to come forward with the transmission request form and death certificate of the deceased shareholder attested by a notary.

     

    In cases where no nomination was made, the LODR allows the legal heirs or identified legal heirs (where there is a will, succession certificate or letter of administration) to claim the transmission of shares by duly submitting the affidavit.

    In the absence of a nominee or will, where shares were held singly and the shares per listed company do not exceed Rs 2 lakh, the LODR regulations require a no-objection certificate from all legal heirs in favour of the claimant of these shares along with an indemnity bond.

    Whereas when the value of such shares exceeds Rs 2 lakh with no will or nominee, the legal heirs have to collectively give a signed declaration affidavit identifying and registering the rightful claimant to those shares.

    Read more about: demat account sebi
    Story first published: Wednesday, January 9, 2019, 11:33 [IST]
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more