JOIN USThe Securities & Exchange Board of India (Sebi), on Friday, provided certain exemptions to promoters from converting their shareholding into demat form.
The market regulator in a circular said that shares where the promoter has died will be exempted from demat conversion. Also, cases where shareholding of promoters are subjudice before any court or tribunal will be given an exemption.
Promoters that have sold their shares in physical format and have not lodged for transfer with the company will also be exempted from dematerialisation. Also, shares, allotted to promoters, that await final approval for listing from stock exchange will be given 30 days for dematerialisation. Once the stock exchange gives final listing approval shares will be given 15 days to demat, it said.
Further, Sebi has set a deadline of December 31, 2011 for the all promoters of listed Indian companies to convert their entire shareholding into demat form. Those failing to do so will see their shares getting moved to trade-to-trade category. Under this category, all transactions have to be delivery-based and price movement will be allowed in a 5 per cent band.
The relaxation was approved after some companies approached Sebi seeking exemption as they were facing difficulties while dematerialising their shares. Promoters of a large number of companies have already converted their shareholding into demat form.