Recommendations of working group on transfer of shares ‑ Acceptance by Government - Follow up for their implementation - Companies Law - Letter : F. No. 1/3/SE/88,

Letter : F. No. 1/3/SE/88, dated 11 ‑ 2 ‑ 1988. Subject:- Recommendations of working group on transfer of shares ‑ Acceptance by Government - Follow up for their implementation You would recall that in pursuance of and announcement made by the Finance Minister in his meeting with Presidents of Stock Exchanges and Chairman of Financial Institutions, selected banks, etc., in November 1987, this Ministry had constituted a Working Group under the convenorship of Shri R. N. Bansal, Member, Company Law Board, to examine the various problems and procedures relating to the transfer of shares. The report of the Working Group has since been received. While some of the recommendations are under consideration of the Department of Company Affairs, the following recommendations have been accepted by the Government and the Stock Exchanges are directed to take necessary action for implementing these : 1. Companies should make arrangements for receipts of transfer documents across the counter at their principal office or an office at a convenient place. Companies having over one lakh shareholders/debenture holders should make arrangements for receipt of transfer documents in metropolitan cities, in addition to the present arrangements. 2. To improve availability of share transfer stamps, the facility of franking machines at stock exchanges and sale of stamps through designated bank branches at other collection centres may be made. 3. Companies should delegate power for transfer of shares, at least of small numbers, to a committee of directors/senior executives. 4. Listing agreement may be modified to have uniform dates of book closures and record dates either on 1st or 16th of any month. 5. Companies may be advised to have book closure only once in a year at the time of annual general meetings and to have only record dates for other purposes like bonus shares, right issues, etc. This may be provided in the listing agreement. 6. There should also be a uniform system for accepting the number of transfer deeds relating to odd lots for forming marketable lots. 7. For new shares arising out of further issues, there shall be only one quotation along with the existing shares, and the new shares should be permitted to be delivered pari passu against these quotations subject to deduction of dividend amount, if any, of the previous year. Regulations of stock exchanges may be suitably amended. 8. The companies must also be required to list their some issues of shares and debentures, whether rights or otherwise, within the stipulated period which may be provided in the listing guidelines. 2. We understand that at the recent meeting of the Presidents of Stock Exchanges, the Exchanges have decided that the number of transfer deeds relating to odd lots for forming marketably fit should be five. It is felt that this uniform practices may be implemented but reviewed after six months and the limit of five transfer deeds either enhanced or done away with if difficulties are experienced by investors because of this. Even now cases should not be rejected on the mere technicality of the number of transfer deeds exceeding five. 3. As regards recommendation No. 8, it is felt that rights issues of securities made by listed companies must be listed on stock exchanges within six weeks from the date of closing of the subscription list.