Good news for investors! SEBI extends deadline to dematerialise physical shares; Check details

Giving some respite to investors, SEBI has extended the deadline to convert physical shares and securities certificates in demat form from 5th December 2018 to 1st April 2019.

The SEBI mandate to dematerialise physical shares doesn’t apply in case of transmission or transposition of securities. (Image: PTI)

New Delhi: Giving some respite to investors, SEBI has extended the deadline to convert physical shares and securities certificates in demat form from 5th December 2018 to 1st April 2019. The decision to extend the mandatory dematerialisation of physical stocks came after several representations and requests were made by scores of investors still holding scrips in physical form. In March 2018, the securities market regulator of India – SEBI had announced that securities and shares held in physical form will become illiquid after 5th December 2018 and anyone intending to trade physical shares will be able to do it only via a dematerialized i.e. Demat mode with a depository. As per BSE, currently 4 per cent of total number of shares of the 30 Sensex companies are in physical share certificate form. The Securities and Exchange Board of India, SEBI’s decision came in the wake of bringing transparency in the shareholding records at companies, safeguarding the ownership of investors by inoculating them from fraudsters and manipulators, and transforming the market transactions into completely electronic mode to ensure safety and ease of business. The SEBI mandate to dematerialize physical shares doesn’t apply in case of transmission or transposition of securities. However, if an investor needs to transfer or sell or trade scrips then it has to be held in a dematerialised form with a depository. Thereby, if you are an investor still holding physical share certificates, and you plan to trade your investments in the near future, then it is better to convert these into demat mode for smooth transactions after 1 st April 2019.