valid as on 06/12/2022

Regulation 40. Transfer or transmission or transposition of securities.
Effective date 01.12.2015

Section 56 of The Companies Act, 2013

Transfer or transmission or transposition of securities.

40.(1) Save as otherwise specified in provisions of securities laws or Companies Act, 2013 and rules made thereunder, the shall also comply with the requirements as specified in this regulation for effecting .

requests for effecting transfer of securities shall not be processed unless the securities are held in the with a depository:

transmission or transposition of securities held in physical or dematerialised form shall be effected only in dematerialised form.

 , except in case of transmission or transposition of securities, requests for effecting transfer of securities shall not be processed unless the securities are held in the with a depository.

(2) The board of directors of a listed entity may delegate the power of transfer of securities to a committee or to compliance officer or to the registrar to an issue and/or share transfer agent(s):
Provided that the board of directors and/or the delegated authority shall attend to the formalities pertaining to transfer of securities at least once in a fortnight:
Provided further that the delegated authority shall report on transfer of securities to the board of directors in each meeting.

(3) On receipt of proper documentation, the listed entity shall register transfers of its securities in the name of the transferee(s) and issue certificates or receipts or advices, as applicable, of transfers; or issue any valid objection or intimation to the transferee or transferor, as the case may be, within a period of fifteen days from the date of such receipt of request for transfer:
Provided that the listed entity shall ensure that transmission requests are processed within seven days , after receipt of the specified documents:
Provided further that proper verifiable dated records of all correspondence with the investor shall be maintained by the listed entity.

(4) The listed entity shall not register transfer when any statutory prohibition or any attachment or prohibitory order of a competent authority restrains it from transferring the securities from the name of the transferor(s).

(5) The listed entity shall not register the transfer of its securities in the name of the transferee(s) when the transferor(s)objects to the transfer:
Provided that the transferor serves on the listed entity, within sixty working days of raising the objection, a prohibitory order of a Court of competent jurisdiction.

(6) The listed entity shall not decline to, register or acknowledge any transfer of shares, on the ground of the transferor(s) being either alone or jointly with any other person or persons indebted to the listed entity on any account whatsoever.

(7) The listed entity shall comply with all procedural requirements as specified in with respect to transfer of securities.

(8) In case the listed entity has not effected transfer of securities within fifteen days or where the listed entity has failed to communicate to the transferee(s)any valid objection to the transfer, within the stipulated time period of fifteen days,the listed entity shall compensate the aggrieved party for the opportunity losses caused during the period of the delay:
Provided that during the intervening period on account of delay in transfer above, the listed entity shall provide all benefits, which have accrued, to the holder of securities in terms of provisions of Section 126 of Companies Act, 2013, and Section 27 of the Securities Contracts (Regulation) Act, 1956:
Provided further that in case of any claim, difference or dispute under this sub-regulation the same shall be referred to and decided by arbitration as provided in the bye-laws and/or regulations of the stock exchange(s).

(9)  The listed entity shall ensure that the share transfer agent and/or the in-house share transfer facility, as the case may be, produces a certificate from a practicing company secretary within    of the end of the financial year, certifying that all certificates have been issued within thirty days of the date of lodgement for transfer, sub-division, consolidation, renewal, exchange or endorsement of calls/allotment monies.

(10)The listed entity shall ensure that certificate mentioned at sub-regulation (9), shall be filed with the stock exchange(s) simultaneously.

(11)In addition to transfer of securities, the provisions of this regulation shall also apply to the following :

(a)deletion of name of the deceased holder(s) of securities, where the securities  are held in the name of two or more holders of securities ;

(b) transmission of securities to the legal heir(s), where deceased holder of securities was the sole holder of securities;

(c)transposition of securities, when there is a change in the order of names in which physical securities are held jointly in the names of two or more holders of securities.

  1. SEBI Circular dated 13.04.2020 on relaxation in adherence to prescribed timelines issued by SEBI due to Covid 19. To view the circular, Click Here.
  2. Guidelines for Issuer Company with respect to Transfer/Transmission/ Correction of errors etc. To view the circular, Click Here Para II (12)(ii) of the circular dated 20.04.2018 is clarified vide Circular No. SEBI/HO/MIRSD/DOS3/CIR/P/2018/115 dated 16.07.2018. To view the circular, Click Here
SEBI has issued Standardised norms for transfer of securities in physical mode vide Circular No. SEBI/HO/MIRSD/DOS3/CIR/P/2018/139 dated 06.11.2018. To view the Circular, Click Here
Substituted vide Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2022 dated 24.01.2022. To view the notification,  Click Here
  1. Refer SEBI Circular regarding issuance of securities in dematerialized form in case of Investor Service Requests. To view the circular dated 25.01.2022, Click Here.
  2. Refer SEBI circular regarding Operational guidelines for Transfer and Dematerialization of re-lodged physical shares. To view the circular dated 02.12.2020, Click Here.
  3. Refer SEBI Clarification on Re-lodgement of Transfer Request Shares which were returned due to deficiency/defects. To view the clarification dated 07.09.2020, Click Here.
  4. Refer SEBI clarification on applicability of regulation 40(1) of SEBI (LODR) Regulations, 2015 to open offers, buybacks and delisting of securities of listed entities. To view the clarification, Click Here.
  5. Refer SEBI circular enhancing Due Diligence for Dematerialization of Physical Securities dated 05.11.2019. To view the Circular. Click Here.
  6. NSE have clarified that to dematerialise the shares Listed entities may send initial letter along with its Annual Report and / or notice of Annual General Meeting and subsequent two reminders may be sent by other modes including ordinary post / courier to holders of physical certificates vide Circular No. NSE/CML/2018/29 dated 17.09.2018. To view the Notification, Click Here
Substituted vide Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2022 dated 24.01.2022. To view the notification,  Click Here
Inserted vide Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations, 2018 date 8thJune,2018 to be effective from 5th December,2018. To view the notification, Click Here 
  1. Refer SEBI circular regarding Operational guidelines for Transfer and Dematerialization of re-lodged physical shares. To view the circular dated 02.12.2020, Click Here.
  2. Refer SEBI Clarification on Relodgement of Transfer Request Shares which were returned due to deficiency/defects. To view the clarification dated 07.09.2020, Click Here.
  3. Refer SEBI clarification on applicability of regulation 40(1) of SEBI (LODR) Regulations, 2015 to open offers, buybacks and delisting of securities of listed entities. To view the clarification, Click Here.
  4. Refer SEBI circular enhancing Due Diligence for Dematerialization of Physical Securities dated 05.11.2019. To view the Circular. Click Here.
  5. NSE have clarified that to dematerialise the shares Listed entities may send initial letter along with its Annual Report and / or notice of Annual General Meeting and subsequent two reminders may be sent by other modes including ordinary post / courier to holders of physical certificates vide Circular No. NSE/CML/2018/29 dated 17.09.2018. To view the Notification, Click Here
Substituted vide Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2022 dated 24.01.2022. To view the notification,  Click Here
Substituted vide Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2022 dated 24.01.2022. To view the notification,  Click Here
To view the schedule,Click Here
Inserted vide SEBI (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations, 2022 notification dated 25.04.2022. To view the notification, Click Here 
Substituted vide SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021 notification dated 05.05.2021. To view the notification, Click Here 
  1. Relaxation w.r.t. the quarter / financial year ending March 31, 2020 provided vide SEBI Circular dated 26.03.2020. The due date for quarter / financial year ending March 31, 2020 shall be May 31, 2020. To view the circular, Click Here.
Omitted vide SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021 notification dated 05.05.2021. To view the notification, Click Here 

SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2022 dated 24.01.2022


Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations, 2018


SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) (FOURTH AMENDMENT) REGULATIONS, 2022 DATED 25.04.2022


Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021 dated 05.05.2021


The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2018 dated 16.11.2018


Circular No.: SEBI/HO/MIRSD/DOP1/CIR/P/2018/73 dated 20/04/2018- Strengthening the Guidelines and Raising Industry standards for RTA, Issuer Companies and Banker to an Issue


Circular on standardised norms for transfer of securities in physical mode dated 06.11.2018


Circular regarding Common and Simplified Norms for processing investor’s service request by RTAs and norms for furnishing PAN, KYC details and Nomination dated 03.11.2021


Circular with respect to mandatory dematerialization for transfer of securities dated 9.07.2018


Clarification dated 31.07.2020 on applicability of regulation 40(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to open offers, buybacks and delisting of securities of listed entities


Clarification on amendment to Regulation 40 of SEBI (LODR) Regulations, 2015 with respect to mandatory dematerialization for transfer of securities dated 17.09.2018


Clarification to circular no. SEBI/HO/MIRSD/DOP1/CIR/P/2018/73 dated 20.04.2018


SEBI Circular dated 02.12.2020 regarding Operational guidelines for Transfer and Dematerialization of re-lodged physical shares


SEBI Circular dated 07.09.2020 regarding Re-lodgement of Transfer Requests Shares


SEBI Circular dated 08.04.2022 Regarding Standard Operating Procedures (SOP) for dispute resolution available under the stock exchange arbitration mechanism for disputes between a listed company and its shareholder(s)/ investor(s)


SEBI Circular dated 13.04.2020 on relaxation in adherence to prescribed timelines issued by SEBI due to Covid 19


SEBI Circular dated 14.12.2021 regarding Clarifications with respect to Circular dated November 03, 2021.


SEBI Circular dated 18.05.2022 regarding Simplification of Procedure and Standardization of Formats of Documents for Transmission of Securities.


SEBI Circular dated 25.01.2022 regarding issuance of securities in dematerialized form in case of Investor Service Requests


SEBI Circular dated 25.02.2022 regarding Extension on “Relaxation in adherence to prescribed timelines issued by SEBI due to Covid 19”


SEBI Circular dated 25.05.2022 regarding Simplification of procedure and standardization of formats of documents for issuance of duplicate securities certificates.


SEBI Circular dated 30.05.2022 regarding Standard Operating Procedure (SOP) for dispute resolution under the Stock Exchange arbitration mechanism for disputes between a Listed Company and/or Registrars to an Issue and Share Transfer Agents (RTAs) and its Shareholder(s)/Investor(s).


SEBI Circular enhancing Due Diligence for Dematerialization of Physical Securities dated 05.11.2019


SEBI Circular on Further relaxations from compliance with certain provisions of LODR and the SEBI circular dated January 22, 2020 relating to SOP due to the CoVID -19 virus pandemic dated 26.03.2020


SEBI Circular on relaxation from requirement to furnish a copy of PAN for transfer of equity shares of Listed Entities executed by non-residents dated 11.02.2019


LODR – SCHEDULE VII

TRANSFER   OF SECURITIES
[See Regulation 40(7) and 61(4)]

A. REQUIREMENT OF PAN

1. For registration of , the transferee(s) as well as transferor(s) shall furnish a to the listed entity for registration of transfer of securities.

 For securities market transactions and/or for off-market or private transactions involving transfer of shares in physical form, the transferee(s) as well as transferor(s) shall furnish copy of PAN card to the listed entity for registration of such transfer of securities.

3. In cases where PAN card is not available i.e. in case of residents of Sikkim, the requirement of PAN Card may be substituted with Identity proof.

4. In case of mismatch in PAN card details as well as difference in maiden name and current name, in case of married women, of the holder(s) of securities, the listed entity may collect the PAN card as submitted by the transferee(s) or transferor(s) as the case maybe:
Provided that this shall be subject to the listed entity verifying the veracity of the claim of such transferee(s) or transferor(s) by collecting sufficient documentary evidence in support of the identity of the transferee(s) or transferor(s).

B. DIFFERENCES IN SIGNATURE

1. In case of minor differences in the signature of the transferor(s), the listed entity shall follow the following procedure for registering transfer of securities:

a. the  listed  entity  shall promptly send to the first transferor(s),  via  speed  post anintimation of the aforesaid defect in the documents and inform the transferor(s)that objection, supported by valid proof, is not lodged by the transferor(s) with the listed entity within fifteen days of receipt of the listed entity’s letter, then the securities shall be transferred;

b. if the intimation to the transferor(s) is delivered and the objection from the transferor(s) with supporting documents is not received within fifteen days, the listed entity shall transfer the securities provided the listed entity does not suspect fraud or forgery in the matter:

Provided that the listed entity shall maintain proof of delivery for in their record(s).

2. In case of major differences in, or non-availability of, the signature of the transferor(s), the listed entity shall follow the following procedure for registering transfer of securities:

a. The listed entity shall promptly send to the transferee(s), via Speed Post, an Objection Memo along with the documents in original marking the reason as “material signature difference/ non-availability of signature” and an advice to ensure submission of requested documents of the transferor(s);

b. The listed entity shall also send a copy of the Objection memo as per clause(a) of sub-para (2) to the transferor(s), via Speed Post, simultaneously;

c. The above Objection Memo in clause (a) and (b) of sub-para (2) shall also state the requirement of additional documents of transferor(s) as follows for effecting the transfer:

i. an Affidavit to update transferor(s) signature in its records;

ii. an original unsigned cancelled cheque and banker’s attestation of the transferor(s) signature and address);

iii. contact details of the transferor(s) and ;

d. If the intimation to both the transferor(s) and the transferee(s) are delivered, requested documents of the transferor(s) are submitted to the listed entity and the address attested by the bank tallies with the address available in the database of listed entity, the listed entity, shall transfer the securities provided the listed entity does not suspect fraud or forgery in the matter:

Provided that listed entity shall maintain proof of delivery in their record(s).

 

(1) In case of transmission of securities, where the securities are held in single name with nomination, the following documents shall be submitted:

(a) duly signed transmission request form by the nominee;

(b) original death certificate or copy of death certificate attested by the nominee subject to verification with the original or copy of death certificate duly attested by a notary public or by a Gazetted Officer;

(c) self-attested copy of the Permanent Account Number card of the nominee, issued by the Income Tax Department.

(2) In case of transmission of securities, where the securities are held in single name without nomination, the following documents shall be submitted:

(a) a notarized affidavit from all legal heir(s) made on non-judicial stamp paper of appropriate value, to the effect of identification and claim of legal ownership to the securities:

Provided that in case the legal heir(s)/claimant(s) are named in the Succession Certificate or Probate of Will or Will or Letter of Administration as may be applicable in terms of Indian Succession Act, 1925 (39 of 1925) or Legal Heirship Certificate or its equivalent certificate issued by a competent Government Authority, an affidavit from such legal heir(s)/claimant(s) alone shall be sufficient;

(b) duly signed transmission request form by the legal heir(s)/claimant(s);

(c) original death certificate or copy of death certificate attested by the legal heir(s)/claimant(s) subject to verification with the original or copy of death certificate duly attested by a notary public or by a Gazetted Officer;

(d) self-attested copy of the Permanent Account Number card of the legal heir(s)/claimant(s), issued by the Income Tax Department;

(e) a copy of Succession Certificate or Probate of Will or Will or Letter of Administration or Court Decree as may be applicable in terms of Indian Succession Act, 1925 (39 of 1925) or Legal Heirship Certificate or its equivalent certificate issued by a competent Government Authority, attested by the legal heir(s)/claimant(s) subject to verification with the original or duly attested by a notary public or by a Gazetted Officer:

Provided that in a case where a copy of Will or a Legal Heirship Certificate or its equivalent certificate issued by a competent Government Authority is submitted, the same shall be accompanied with a notarized indemnity bond from the legal heir(s) /claimant(s) to whom the securities are transmitted, in the format specified by the Board:

Provided further that in a case where a copy of Legal Heirship Certificate or its equivalent certificate issued by a competent Government Authority is submitted, the same shall also be accompanied with a No Objection from all non-claimants, stating that they have relinquished their rights to the claim for transmission of securities;

(f) for cases where value of securities is up to rupees five lakhs per listed entity in case of securities held in physical mode, and up to rupees fifteen lakhs per beneficial owner in case of securities held in dematerialized mode, as on date of application, and where the documents mentioned in para (e) are not available, the legal heir(s) /claimant(s) may submit the following documents:

(i) no objection certificate from all legal heir(s) stating that they do not object to such transmission or copy of family settlement deed executed by all the legal heirs duly attested by a notary public or by a Gazetted Officer; and

(ii) a notarized indemnity bond made on non-judicial stamp paper of appropriate value, indemnifying the Share Transfer Agent/ listed entity, in the format specified by the Board:

Provided that the listed entity may, at its discretion, enhance the value of securities from the threshold limit of rupees five lakhs, in case of securities held in physical mode.”

C. ADITIONAL DOCUMENTATION REQUIREMENTS IN CASE OF TRANSMISSION OF SECURITIES

1. In case of transmission of securities held in dematerialized mode, where the securities are held in a single name without a nominee, for the purpose of following simplified documentation, as prescribed by the depositories vide bye-laws or operating instructions, as applicable, the threshold limit is rupees five lakhs only per beneficiary owner account.

2. In case of transmission of securities held in physical mode:

a. where the securities are held in single name with a nominee:

i. duly signed transmission request form by the nominee;

ii. original or copy of death certificate duly attested by a notary public or by a gazetted officer;

iii. self attested copy of PAN card of the nominee.

where the securities are held in single name without a nominee, an affidavit from all legal heir(s) made on appropriate non judicial stamp paper, to the effect of identification and claim of legal ownership to the securities shall be required;

Provided that in case the legal heir(s)/claimant(s) is named in the succession certificate or probate of will or will or letter of administration, an affidavit from such legal heir(s) / claimant(s) alone would be sufficient.

Provided further that:

(i) for value of securities, threshold limit of up to rupees two lakh only, per listed entity, as on date of application, a succession certificate or probate of will or will or letter of administration or court decree, as may be applicable in terms of Indian Succession Act, 1925 may be submitted : Provided that in the absence of such documents, the following documents may be submitted:

1. no objection certificate from all legal heir(s) who do not object to such transmission or copy of family settlement deed duly notarized and executed by all the legal heirs of the deceased holder;

2. an indemnity bond made on appropriate non judicial stamp paper, indemnifying the Share Transfer Agent / listed entity;

(ii) for value of securities, more than rupees two lakh, per listed entity, as on date of application, a succession certificate or probate of will or will or letter of administration or court decree, as may be applicable in terms of Indian Succession Act, 1925 shall be submitted;

(iii) the listed entity however, at its discretion, may enhance value of securities, threshold limit, of rupees two lakh.

b. where the securities are held in single name without a nominee, a affidavit made on appropriate non judicial stamp paper , to the effect of identification and claim of legal ownership to the securities shall be required and additionally

i. for value of securities, threshold limit of upto rupees two lakh only, per listed entity, as on date of application, one or more of the following documents may be submitted :

1. No objection certificate from all legal heir(s) who do not object to such transmission or copy of family settlement deed duly notarized or attested by a gazetted officer and executed by all the legal heirs of the deceased holder;

2. indemnity made on appropriate non judicial stamp paper, indemnifying the listed entity ;

ii. for value of securities, threshold limit, more than rupees two lakh, per listed entity, as on date of application, succession certificate or probate of will or letter of administration or court decree shall be submitted;

iii. the listed entity however, at its discretion, may enhance value of securities, threshold limit, of rupees two lakh.

Inserted vide SEBI (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations, 2022 notification dated 25.04.2022. To view the notification, Click Here 
 SEBI has issued Standardised norms for transfer of securities in physical mode vide Circular No. SEBI/HO/MIRSD/DOS3/CIR/P/2018/139 dated 06.11.2018. To view the Circular, Click Here

View the SEBI Circular on Simplification of procedure and standardization of formats of documents for issuance of duplicate securities certificates dated 25.05.2022. To view the Circular, Click Here.

View the SEBI Circular dated 14.12.2021 regarding clarifications with respect to Circular dated November 03, 2021, on ‘Common and simplified norms for processing investor’s service request by RTAs and norms for furnishing PAN, KYC details and Nomination’. To view the Circular, Click Here.

View the SEBI Circular on Common and Simplified Norms for processing investor’s service request by RTAs and norms for furnishing PAN, KYC details and Nomination dated 04.11.2021. To view the Circular, Click Here.

SEBI has relaxed the requirement to furnish a copy of PAN for transfer of equity shares of Listed Entities executed by non-residents vide its Circular dated 11.02.2019 . To view the Circular, Click Here.

Omitted vide Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations, 2018. dated 8th June,2018 effective from 5th December,2018. To view the notification Click Here
Substituted vide SEBI (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations, 2022 notification dated 25.04.2022. To view the notification, Click Here 
Substituted vide  Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2018 dated 16th November,2018. To view the notificationClick Here

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