The ban on the transfer of shares in physical form was introduced by SEBI in late 2018. In accordance with the regulation imposed by SEBI, it is mandatory for shareholders to convert their shares into Demat form for the purpose of transfer of shares applicable from 1st April 2019. Investors are still permitted to hold shares in the physical form but, any share transfer request using physical shares will be turned away and will only be possible once shares are converted into Demat form. SEBI further clarified that:
- This decision does not prohibit shareholders from holding physical shares even after 01st April 2019.
- Any investor, who wants to transfer the shares after 01st April 2019 can do so only after shares are dematerialized.
- Any transfer deed(s) once lodged prior to 01st April 2019 and returned due to any deficiency/discrepancy in the documents can be re-lodged for transfer even after 01st April 2019