Sebi’s Plan to Help Investors with Old Shareholdings Analyzed

The Securities and Exchange Board of India (Sebi) is making a change to how investors handle old shares. They’ve proposed new rules to make it easier for people who didn’t manage to sort out their investments by April 1, 2019. This is a big deal because many investors faced problems getting their shares properly transferred and recorded.

Key Points

• Sebi offers a final chance to fix old share transfer issues.
• New rules simplify dematerialization processes for all investors currently.
• RTA’s will conduct due diligence to ensure secure transactions.
• Direct credit to demat accounts cuts down on paperwork delays.
• Elimination of the Letter of Confirmation speeds up the process.
• Focus on electronic systems improves investor service efficiency.

Previously, Sebi stopped allowing people to transfer physical shares starting in April 2019. This was to encourage everyone to move their shares to electronic accounts (dematerialized accounts). However, many investors struggled because their transfer requests were rejected, companies had closed down, or the people they needed to contact weren’t cooperating.

Now, Sebi wants to give these investors a second chance. They’ll allow them to submit their old transfer requests, but only after a Registered Transfer Agent (RTA) and the company holding the shares carefully check everything. Once everything is confirmed, the shares will be automatically moved into the investor’s demat account.

Sebi is also changing how dematerialization works entirely. Currently, investors have to get a “Letter of Confirmation” (LoC) – a document that shows the shares are being processed. This process takes a long time and creates a lot of paperwork. Sebi wants RTAs and companies to directly credit the shares into the investor’s demat account after checking the information.

To make this even easier, investors will need to provide their demat account details when they submit a request for things like duplicate certificates or transferring ownership. This electronic system will speed things up and reduce the time it takes to get the shares transferred.

Sebi believes this new approach will benefit everyone by simplifying the process and helping investors manage their shareholdings more efficiently.

Ultimately, Sebi’s changes aim to create a smoother, faster, and more secure experience for all investors.