Inter-Depository Transfer of Beneficial Ownership of Securities - Companies Law - SMDRP/POLICY/CIR-13/99,

SMDRP/POLICY/CIR-13/99, dated 19-5-1999 Subject:- Inter-Depository Transfer of Beneficial Ownership of Securities Provisions of section 10 of the Depositories Act, 1996 provides that notwithstanding anything contained in any other law, a depository shall be deemed to be registered owner for the purposes of effecting transfer of ownership of securities on behalf of beneficial owner. As per the provisions of sub-section (2) of section 111A of the Companies Act, 1956, as amended by the Depositories Act of 1996, shares or debentures and any interest therein of a company are freely transferable. Regulation 31 of the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 provides that every depository shall maintain continuous electronic means of communication with all its participants, issuers or issuer agents, as the case may be. Section 19 of the Depositories Act empowers the SEBI to issue directions to issuers, registrars and share transfer agents and the depository after causing an enquiry to be made. In view of the above legal provisions, and after causing an enquiry to be made and on being satisfied that it is necessary in the interest of investors as well as for orderly development of securities market and for expeditious inter-depository transfer of securities, the following directions in exercise of the powers conferred to the Board under the Depositories Act are issued to the issuers whose securities have been dematerialised and to their registrars and share transfer agents : Inter-depository transfer of beneficial ownership of securities shall be effected by the depositories only after the change in registered ownership in favour of the transferee-depository has been effected by the issuer-company or the registrar and share transfer agent, as the case may be. The issuer-company or the Registrar to an issue and the share transfer agent, as the case may be, shall effect the necessary changes of the registered ownership of securities in their records and communicate the same to the depositories within two hours of the receipt of the request for transfers. This directive shall come into effect immediately.