Appendix 86
GUIDELINES FOR GOOD OR BAD DELIVERY OF DOCUMENTS
[Issued by the Secondary Market Department of SEBI vide Press Release
No. 68 of 96 dated 16‑7‑1996]
1. One of the major problems
afflicting the Secondary Market is that of bad deliveries caused by various
factors, the main being, the non‑transfer of shares of companies on
account of signature differences. Thee different norms for good and bad
deliveries adopted by Stock Exchanges further compound the problem.
2. SEBI
has already taken several steps to deal with the problem. For example, SEBI has
notified the Depositories Regulations facilitating setting up of depositories
which will provide long term solution to the problem of bad deliveries and non‑transfer
of shares. SEBI has also advised all stock exchanges to amend their listing
agreement to cast an obligation on the listed companies to transfer the shares
within the prescribed period in case of minor signature difference, if no
objection is received from the transferors. the problem has also been discussed
by the Executive Committee of Inter‑Exchange Coordination Group of the
Stock Exchanges. Based on their recommendations and further discussion with some
of the major stock exchanges and custodians, SEBI has taken the following
decisions on this subject:
(i) All Stock Exchanges shall adopt uniform
norms for good/bad deliveries (which are enclosed as Annexure "A ")
with immediate effect.
(ii) Each Stock Exchange shall set up a
separate Bad Delivery Cell (BDC) latest by 31‑8-1996. This cell will deal
with cases relating to bad deliveries received from its own members as well as
those received from similar cells of other stock exchanges. The Exchanges will
ensure that adequate insurance cover exists for possible transit loss.
(iii) All stock exchanges shall adhere to the
following time schedule for dealing with the cases of bad deliveries.
(a) In the case of deliveries coming under
objection (objection cases), the first introducing broker of the same stock
exchange shall be required to rectify the defects/replace the shares along with
accrued benefits within 21 calendar days from the date of receipt of the
objection and share certificates from the last buying broker of that exchange.
If the former fails to rectify the defects or replace the shares or transfer
deeds, the exchange shall hold an auction for shares in the immediately
following Auction Session according to the usual exchange procedure. The shares
obtained from such as auction shall be given by the Exchange to the concerned
buying broker. Further, the exchange shall debit the price of the shares to the
account of the introducing broker of that exchange. In case the shares are not
available through auction, the exchange shall close out the transaction
according to the procedure of the exchange and the close out amount shall be
debited to the first introducing broker and credited to the last buying broker
of the exchange.
(b) As regard the inter‑exchange bad
delivery cases, after the procedure outlined in para 2(iii)(a) has been
followed, the introducing broker of the last exchange may submit his objection
to the BDC of the Exchange of which he is the member. Such BDC of the last
exchange (of which he is the member), in turn, within 7 days from receipt of
such objection shall forward the objection along with share certificate to the
BDC of the first exchange, where the shares were initially introduced. The BDC
of the first exchange shall require its first introducing broker to rectify the
objection or replace the shares within 21 days failing which the exchange shall
take recourse to auction or thereafter close out, if required, and make
consequent adjustment as indicated in para 2(iii)(a) above. Thereafter within
seven days the BDC of the first exchange shall forward the rectified
objection/replaced shares or shares received in auction or close out amount as
the case may be to the BDC of the last exchange.
(c) Procedures relating to inter‑exchange
bad deliveries shall be implemented on formation of BDCs (to be set up to 31‑8‑1996)
at various exchanges pending which the present procedures may continue.
(iv) All new objection cases on or after 1‑8‑1996
as well as all un rectified objection cases pending as on 1‑8‑1996,
shall be settled according to the procedure and time schedule referred to in
para 2(iii) above.
(v) In the event of shares coming under
objection for the second time, they will be compulsorily auctioned/closed out
as per the procedure of the Stock Exchange.
(vi) The validity period of Company Objection
by the last buying broker to be notified to the Exchange/Introducing broker
will be 36 months from the date of payment by the buyer.
(vii) The Custodians shall also follow the
uniform norms and procedures referred to above. Further, the custodian shall
also be required to participate in settlement and bad delivery processes of
clearing houses of the stock exchanges, so that on the one hand they get the
benefit of the revised and expeditious system of speedy resolution of bad
deliveries and on the other their risk would also be reduced.
(viii) All the exchanges are directed to
implement the decisions mentioned in para 2 above and send compliance reports
to SEBI by 15‑9‑1996.
Please refer to
our letter No. SMD/RCG/2796/96 dated 16‑7‑1996, on the subject of
Uniform norms for Good/Bad deliveries. We have received requests for
clarification regarding the applicability of the validity period of the company
objections, referred in para 2(vi) of our above referred letter and in item No.
97 of the annexure accompanied with the said letter, from some of the
exchanges. A clarification on the issue, also appears necessary in view of
comments from public in certain sections of the press.
In this regard, we would
like to advise the stock exchanges as under:
1. In cases where the date of the company
objection is 16‑7‑1996 or any subsequent date, the validity period
of company objection by the last buying broker to be notified to the
exchange/introducing broker will be 36 months from the date of payment by the
buyer.
2. In all other pending cases of company
objections, bearing a date prior to 16‑7‑1996, the validity period
will be as per the rules‑of the respective exchanges‑as existing
prior to 16‑7‑1996.
3. However, in old time‑barred
pending cases (request cases), the exchanges may take their own decisions as
per the merits of the case and keeping the principles of natural justice in
view.
Circular No. SMD/Policy/CIR 21/97, dated 20th August, 1997 issued by
the Securities and Exchange Board of India
This is continuation of
SEBI's previous Circular Nos. SMD/POLICY/BDC/426/96, dated 4th October, 1996
and SMD/POLICY/BDC/5547/96, dated 9th December, 1996. It has been reported that
in many cases of company objection due to fake/forged/stolen shares sent for
rectification to the introducing member, a different set of similar quantity of
shares in lieu of these shares are being given by the introducing members,
thereby perpetuating the problem. It has, therefore, been decided that in cases
of company objection due to fake/forged/stolen shares, the clearing
house/clearing corporation may compulsorily put the shares for auction, and if
necessary close‑out. No opportunity for rectification may be given to the
introducing broker.
ANNEXURE A
|
No. |
Description |
Good/Bad |
||||
|
1. |
Transfer Deeds in the prescribed form and printed
with the words "For the __________ Stock Exchange". Stock Exchange emblem may or may not be printed.
Month and year of printing may or may not be put on the reverse of the
Transfer Deed. |
Good |
||||
|
2. |
Mutilated Transfer Deed with the signatures of the
transferor, witness, Directors and officer of the Company/distinctive numbers/any
material portion badly tom, overwritten, or defaced. Typical Cases: (A)
Material portion defied here only pertains to the material portions
at the time of delivery and not prospective one. For a buyer Consideration
column. Specimen signature column. Name, Address, Occupation will also be the
material portion.
Material portion includes of transferor's name and signature, company
name folio no., certificate number, distinctive nos., number of shares, name
and signature of the transferee, specimen signature of transferee. (B)
Transfer Deed tom in the prospective material portion ·
Torn and pasted with self‑adhesive tape on which the required
details can be filled in without any difficulty. ·
Transfer Deed tom in non‑material portion and held together by
a transparent tape. ·
Transfer Deed tom end‑to‑end in any angle. |
Bad Good Good Bad |
||||
|
3. |
Transfer Deeds with correction in the material
portion like, erasure, overwriting, alteration or crossing out by
transferor/authorised Signatory. |
Good if properly
authenticated under the full signatures of the transferors |
||||
|
4. |
If the name of the transferor(s) in the share
certificate & the name in the transfer deed(s) differs materially. Differences of the following type (vice versa) (A) Addition or Deletion of 1 to 2 alphabets. (B) Krishna Chandra Chelura‑C.C. Krishna. (C) Corporation‑Corpn./Corp. |
Bad Good Bad Good |
||||
|
5. |
Transfer Deeds signed as 'Choonilal' whereas in
share certificate the name is spelt as 'Chunilal'. Other than any apparent difference in seller's
signature must be accepted. In case of apparent difference like to S. Rao
signing as David. In case S. Rao signing as Subhash since the first
letter of the signature matches with the initial. |
Good Bad Good |
||||
|
6. |
Transferor's signature in English, Hindi or any
one of the Scheduled languages in India. Assamese, Bengali, Gujarati, Hindi, Kannada,
Kashmiri, Malayalam, Marathi, Oriya, Punjabi, Sanskrit, Tamil, Telugu and
Urdu‑ As per Constitution of India‑ English Schedule [Articles
314(1) and 451]. |
Good |
|||
|
7. |
Signature of the Transferor is in an Indian
language other than the Scheduled languages of India or when the Transferor
has affixed his thumb impression. If attested by any person authorised to attest
signatures under the Seal/Stamp of his office. |
Good |
|||
|
8. |
Transfer Deeds in respect of joint holdings signed
by all the joint holders in any order. Provided the signatures are against the relative
name filled up in the Transfer Deed. |
Good |
|||
|
9. |
Transfer Deeds without the name of the Company,
name(s) ofTransferor(s), Folio No. Share Certificate No., Distinctive No. and
number of shares being written. |
Bad |
|||
|
10. |
In one lot with one Transfer Deed name on one
certificate reading as "Ramesh C Talati" and on another certificate
as "Ramesh Chunilal Talati" but Register Folios same on both. In one lot, separate transfer deeds are required
for each registered folio. If the transferor's name is identical and folios
are different and there is only one transfer deed. |
Good Good Good |
|||
|
11. |
In one lot with one Transfer Deed names on
different certificates reading as Ramesh Chunilal Talati and Talati Ramesh
Chunilal but Register Folio is same. |
Good |
|||
|
12. |
Income Tax Authority or Collector signs as
Transferor. |
Good |
|||
|
13. |
Instead of Executor's signature, his Agent's
signature is put on the Transfer Deed. (Number and Date of Registration of Power of
Attorney necessary). |
Good |
|||
|
14. |
Executor's signature without his rubber stamp. (Number and Date of Registration of Power of
Attorney necessary). |
Good |
|||
|
15. |
In the case of Units transfer deed in the name of
a Minor and signed by natural Guardian. (In the case of Court Guardian a
Court order is required). Shares cannot be held in the name of a Minor
unless accompanied by Court Order granting permission for sales/purchase
which is beneficial to the minor. |
Good Good, if accompained by
relevant Court Order for sale |
|||
|
16. |
Transfer Deeds signed by an individual against
whom insolvency proceedings are pending ·
Unless the transfer deed is duly certified and counter‑signed
by the Official Assignee |
Bad Good |
|||
|
17. |
Transfer deeds signed under Power of Attorney
where the power given is subject to conditions ·
Transfer deed signed by Director of the Company and under Board
Resolution not mentioned on the front or the reverse of the transfer deed. ·
Transfer deed signed by an authorised signatory under Power of
Attorney. ·
Transfer deed signed by an authorised signatory of a custodian and
the P/A registration No. is mentioned on face or the reverse of transfer
deed. ·
Where the transfer deeds are signed by an authorised signatory under
a Board Resolution and the stamp UNDER BOARD RESOLUTION is mentioned on the
face or the reverse of the transfer deed. |
Bad Good Good only if P/A regn. No.
date signature & stamp of the introducing Member is mentioned on the
reverse of Transfer Deed Good Good |
|||
|
18. |
Transfer Deed signed by custodian on behalf of a
client ·
In the signature column the custodian does not put the stamp as
'Constituted Attorney' on behalf of the transferor. ·
Transfer Deed signed by a Custodian on behalf of the client and in
the signature column it puts the stamp "By constituted Attorney to the
transferor" with the P/A number given on the reverse of the TD with the
stamp and signature of the custodian. ·
The above mentioned details entered on the face of the TD and not
mentioned on the reverse of the TD. |
Bad Good Good |
|||
|
19. |
Shares sold by FIIs and transfer deed signed by a
Custodian on behalf of the FII (Copy of RBI approval is not required to be
attached with each market lot). |
Good |
|||
|
20. |
In case of GDR, ·
Photocopies of RBI approval attached to the deliveries; Or ·
If RBI approval number and date is mentioned on the transfer deed and
attested by the introducing member. |
Good Good |
|||
|
21. |
Consideration amount and date of execution of the
transfer deeds are filled in. |
Bad |
|||
|
22. |
Transfer Deeds signed by or on behalf of a Company
against which liquidation proceedings are pending. ·
Unless the Transfer Deed is certified and countersigned by the
Liquidators. |
Bad Good |
|||
|
23. |
The name of the delivering broker with his SEBI
Registration number and date not mentioned in the back of the Transfer Deed. In case the shares are delivered to the Clearing
House by the Custodian and the Transfer deed bears the stamp of Custodian
along with the Clearing Number of the Broker on whose behalf the shares are
delivered. The date
should be the pay‑in date/delivery date only. |
Bad |
|||
|
24. |
Shares held by a TRUST and Signed on the Transfer Deed as "NAME OF TRUST PROPRIETOR" TD signed as "NAME OF TRUST‑TRUSTEE" Shares held in the name of a trust, if accompanied
by a copy of the resolution or the relevant portion of the trust deed
authorising the trustees to transact in securities on behalf of the trust. |
Bad Bad Good |
|||
|
25. |
If shares held are duly registered by the company
in the name of the HUF (Shares held by HUF and signed by KARTA). |
Good |
|||
|
26. |
Transferor's signature witnessed by a person but
his full name not given as long as the name and address of the witness are
perfectly legible. |
Good |
|||
|
27. |
Witness name, address and signature is in a
language other than English specified by the Ministry of Finance Assamese, Bengali, Gujarati, Hindi, Kannada,
Kashmiri, Malayalam, Marathi, Oriya, Punjabi, Sanskrit, Tamil, Telugu and
Urdu‑as per Constitution of India‑English Schedule [Articles
314(1) and 451]. If signed in a language other than specified by
Ministry of Finance |
Good Bad |
|||
|
28. |
Attestation stamp in any one of the Scheduled
languages in India. Indian languages: Assamese, Bengali, Gujarati, Hindi, Kannada,
Kashmiri, Malayalam, Marathi, Oriya, punjabi, Sanskrit, Tamil, Telugu and
Urdu‑as per Constitution of India‑English Schedule [Articles
314(1) and 451)]. |
Good |
|||
|
29. |
Transferor's signature attested by a Bank official ·
only the designation mentioned. ·
If the Name, Designation of the attesting authority signing along
with the complete address is given |
Bad Good |
|||
|
30. |
Attestation by Gram Panchayat or a Surpanch or
Village Magistrate or Village Munsiff under his seal. |
Good |
|||
|
31. |
Signature attested by any person authorised to
attest signatures with his full name and address with the Official Seal/Stamp
of his office. |
Good |
|||
|
32. |
Transferor's signature is attested by a Notary
Public (The necessary seal, rubber stamp, adhesive stamps
as prescribed for such attestation should be affixed in cases where Notary
attestation is required, i.e., In cases where Rectification of objections is
required due to signature differences). |
Good |
|||
|
33. |
Transfer Deed is signed by the transferor ·
Signature is clearly of a name different than the name of the
transferor. ·
If signature is same for two different shareholders under two
different Transfer Deeds |
Bad Bad |
|||
|
34. |
Marketable lot with more than five transfer deeds. Up to five transfer deeds used to make a
marketable lot. |
Bad Good |
|||
|
35. |
New shares which are issued on pro rata basis and
old shares standing in the folio and name of same transferor and accompanied
by one transfer deed for a marketable lot. (The new share dividend declared for the previous
year i.e., the old new compensatory value (ONCV) would be payable on the
entire market lot). |
Good |
|||
|
36. |
Company's name has been changed but it has not
been corrected on the share certificate. |
Good |
|||
|
37. |
Abbreviated name of a Company filled up in the
transfer deed If from the abbreviated name the identity of the
company can be ascertained. The name of the Company should be identifiable.,
e.g., TELCO, TISCO, L&T, etc. |
Good |
|||
|
38. |
Exact position of TDs to be attached on top of the
certificate. TD should be placed on the top of the share
certificate. |
|
|||
|
39. |
Transferor and witness is the same. |
Bad |
|||
|
40. |
Transfer Deeds in the prescribed form and name of
a particular Stock Exchange filled in or not. |
Good |
|||
|
41. |
Transfer Deed not in the prescribed form. |
Bad |
|||
|
42. |
Witness and attesting authority identical. |
Good |
|||
|
43. |
Transfer Deeds bearing signatures of witnesses,
the address of the witness being in a different city or town or Centre other
than that of Transferor or Transferee. |
Good |
|||
|
44. |
Prescribed Authority (ROC) Seal overlapping and
stamped twice. Even if the signature of the Registrar of
Companies is partly printed and the date stamp is also partly printed but
both the signature and the date should be apparent. |
Good |
|||
|
45. |
The Endorsement of the Prescribed Authority (e.g.,
Registrar of Companies) bears the same date as the date from which the
Register of Members of the Company is closed. |
Good |
|||
|
46. |
If the Endorsement of the prescribed Authority
(e.g., Registrar of Companies) bears a date prior to the date of issue of
share certificate or the date of allotment of shares. Provided the Endorsement of the Prescribed
Authority bears a date of or after the date from which the Register of
Members of the Company closed last. |
Good |
|||
|
47. |
Transfer Deed endorsed by the Prescribed Authority
on a date prior to closure of the Register of Members of the Company
delivered after the date of closure of Register of Members. |
Bad |
|||
|
48. |
Transfer Deeds accompanying debenture certificates
or any other permissible listed security (other than equity) whether date
stamped by the prescribed Authority or not. Provided for the convertible portion a separate
date‑stamped Transfer Deed is delivered. |
Good |
|||
|
50. |
Witness is a Non‑resident and the address
given is of a foreign country. |
Good |
|||
|
51. |
Distinctive numbers range 'TO" partly filled
in the transfer deed, e.g., 4589201‑300 etc. |
Good |
|||
|
52. |
In the case of mutual funds, the ROC stamp and
signature are missing (except in case of Schemes of Unit Trust of India). |
Good |
|||
|
53. |
Certificates with multiple folio per market lot
attached to separate transfer deed (subject to guideline No. 35 above). |
Good |
|||
|
54. |
Logo of the Stock Exchange on the reverse of the
transfer deed missing. |
Good |
|||
|
55. |
Attestation of the transferor's signatures is not mandatory. Except in the case where the transfer has been
returned by the company due to SIGNATURE DIFFERENCE. |
Good |
|||
|
56. |
Units issued with the terms 'either or survivor',
if signed by all holders. If signed by any one of the holders. |
Good Good |
|||
|
57. |
Transferor's signature on the transfer deed is
facsimile signature for Registered Custodians. |
Good |
|||
|
58. |
Certified Transfer Deed Provided the name and address of the Transferor,
the distinctive numbers of the shares covered by the Transfer Deed and date
of certificate are given. |
Good |
|||
|
59. |
Any erasure or alteration in the Certified
Transfer Deed. When authenticated by an authorised signatory of
the company. |
Good |
|||
|
60. |
Certified Transfer Deeds and share certificates
delivered in part for bargains in market trading unit. |
Good |
|||
|
61. |
In case of shares under lock‑in‑period,
if the transfer deed date is prior to the lock‑in‑period last
date but the date of introduction into the market is after the last date of
lock‑in‑period. If the transfer deed date is prior to the lock‑in‑period
last date and the date of introduction into the market is before the last
date of lock‑in‑ period. |
Good Bad |
|||
|
62. |
Some companies allot record numbers for shares
issued by them apart from distinctive number ranges. For these shares, if record
number is filled up along with distinctive number ranges on the transfer
deed. If only the record number has been filled up
instead of distinctive number ranges on the transfer deed. |
Good Good Bad |
|||
|
62A. |
Transfer deeds (dated 1st June, 1997
and thereafter) bearing rubber stamps on the reverse thereof other than those
of members of the stock exchanges/clearing house/clearing corporations, SEBI
registered sub‑brokers and remisiers registered with the stock
exchanges. Notes on clause 63 In spite of the Issue of Shares Certificate Rules
requirement that the company affix its common seal on each share certificate,
it has been observed that a lot of companies have not affixed the common seal
on their share certificates. This is one of the causes of a lot of bad
deliveries in the market and has caused inconvenience to the investor for
which the companies are responsible. In order to avoid undue hardship to
investors, it has been agreed that the stock exchange may accept the share
certificate without common seal of the company for market deliveries,
however, the genuineness of the share certificate would continue to be
checked at the Company/Registrar's end. The stock exchange would also
initiate action against the companies for non compliance of the rules
concerning Issue of Share Certificates. Accordingly, clause 63 of the uniform
norms for good/bad deliveries stands amended as under: |
Bad |
||||
|
63. |
Name of the company or emblem is not readable in
the common seal or there is no common seal on the share certificate. |
Good |
||||
|
64. |
The last date for payment of call has expired and
the call has not been paid or if the call has been paid, the necessary Call
Receipt has not been attached. The call payment receipt with the stamp of the
Bank before or on the due if attached to the securities is good delivery for
three months from the last date of call payment or next book closure
announced by the company whichever is later. All call
payment receipts after due date must be endorsed as "cheque/ draft
realised" by the Bank/Co./Registrars. |
Bad Good Good |
||||
|
65. |
All securities with sticker issued by the
companies in lieu of endorsement. |
Good |
||||
|
66. |
If call money paid but not endorsed on share
certificate even after the book closure but transfer affected after the call
payment date. |
Bad |
||||
|
67. |
If the final call is endorsed but the initial or
the initial and the second call not endorsed. (i.e., if marked "FULLY
PAID"). |
Good |
||||
|
68. |
In case of fully convertible debentures, after the
debentures have been converted into equity, if call money endorsement has
been done only for the equity portion and not for the debenture portion or
vice versa. |
Good |
||||
|
69. |
Call paid endorsements made by the company with
call amount and signature of the authorised signatory with or without the
rubber stamp of the company and date of payment of the call. |
Good |
||||
|
70. |
In the case of party said shares, when a call has
been made but not paid and delivery effected during the period of ten days before
the last date fixed for payment. If the call receipts are attached to the
documents. |
Bad Good |
||||
|
71. |
Application Receipts and Call money receipts not
bearing bank stamps and payment details. |
Bad |
||||
|
72. |
Any significant correction, erasure, overwriting,
crossing out or alteration in the quantity of the shares, in the last
registered holders name or in any material particulars on the share certificate. Unless the Authorised Signatory who has signed on
the certificate, authenticates the correction or the correction is initialed
and authenticated by any other officer under the Company's rubber stamp. |
Bad Good |
||||
|
73. |
Certificates badly torn as is not to be a
deliverably condition or share certificate torn through and through or badly
torn as to obliterate or render illegible or create the impression of cancelling
the numbers or directors or other signature or the date or any other
particulars or if it is written upon or damaged or mutilated by
advertisements, printing, rubber stamp or otherwise or if a material part of
the certificate be torn out or cut off. |
Bad |
||||
|
74. |
Share certificates defaced or mutilated in portion
: The following will be considered as material
portion in the case of share certificate: (i)
Share certificate torn end to end and pasted with transparent self‑adhesive
tape. (ii)
Where shares have been transferred to a new holder and if torn at the
original holders name portion. (iii)
Folio number and name overwritten in one or two characters and not
authenticated by the authorised signatory. (iv)
If the share certificate is torn at the company name portion but is
decipherable. (v)
Corrections in transfer Number or Date of transfers, if legible and
not authenticated. (vi)
Share Certificates with bar codes not concealing any material
information. |
Bad Bad Good Good Good Good Good |
||||
|
75. |
If the name of the Company has been disfigured in
the body of the share certificate so as to affect it materially. If the name
of the company is identifiable. |
Bad Good |
||||
|
76. |
Certificates in the case of UNITS discharged by
the transferor for purpose of repurchase and then cancelled by him and initialled. |
Bad |
||||
|
77. |
Share certificate contains one name but the
transfer deed consists of two signatures. If both the
signatures on the transfer deed are identical in nature or can be identified
as signature of the same person. If the transferor has signed twice but has
struct off the 2nd signature. |
Bad Good |
||||
|
78. |
Share certificate contains name of one transferor
but transfer deed contains two names and signatures respectively. |
Bad |
||||
|
79. |
Preferential/promoters' quota shares under lock‑in‑period
delivered which are not transferable. |
Bad |
||||
|
80. |
Share certificate issued without the signature of
Secretary/ Authorised signatory. If the
shares are transferred subsequently and the authorized signatory has signed
against such transfer. |
Bad Good |
||||
|
81. |
Signature missing in the initial column but signed
by Authorised signatory in the required column on the reverse of the
certificate. |
Good |
||||
|
82. |
Endorsement effected on the reverse of the
certificate and struck off and again endorsed. |
Good subject
to proper authentication by the Company by putting a round stamp of the
Company. |
||||
|
83. |
Certificate with company's old registered office
crossed out and new address stamped without authentication. |
Good |
||||
|
84. |
Certificate without mentioning the place of issue. |
Good |
||||
|
85. |
Revenue stamp affixed on the certificate
concealing any material portion of the certificate. Provided any
material portion like locking period date, NRI details are not affected. |
Good |
||||
|
86. |
Revenue stamps affixed/impressed by the company on
the share certificate has come off. |
Good |
||||
|
87. |
Any alteration or erasure or correction without
initials in the transfer endorsement on the back of the share certificate as
for example made in the year 1960 and subsequently the shares have again been
transferred by the Company, say in 1961. |
Good |
||||
|
88. |
Share certificates with irrelevant or extraneous
rubber stamp or writings on the scrip. Provided the rubber stamp or the writing does not
affect any material portion of the scrip. |
Good |
||||
|
89. |
Increase or decrease of the Capital and if the
certificate does not carry the endorsement on the face of the certificate. |
Good |
||||
|
90. |
Absence of holder's discharge on the letter of
Allotment. |
Good |
||||
|
91. |
Share Certificate and Transfer Deed not attached
together. |
Bad |
||||
|
92. |
Shares standing in the name of Non‑ Resident
Individuals. Provided the declaration stamp as per the RBI
guideline is affixed and countersigned by the introducing member. |
Good |
||||
|
93. |
Name of the holder printed in two lines which
looks like joint holding or one line of address printed and looking like
second holder. |
Good |
||||
|
94. |
Lock‑in‑period mentioned in the
certificate, without specific date of release of lock‑in. |
Good |
||||
|
95. |
Shares issued in the name of Sole
Proprietor/Partnership firm signed by the Proprietor/Partner. Units/debentures issued in the name of the Sole
Proprietor/partnership firm signed by the Proprietor/partner. |
Bad |
||||
|
96. |
In case of the shares of a company are not pari
passu with the existing equity shares of the company in two financial years
then new share dividend declared for the previous year, i.e., the old new
compensatory value (ONCV) for two years has to be paid. The full dividend declared will have to be paid
(interim + final). |
Good |
||||
97. Validity period of company objection by
the last buying broker to be notified to the exchange/ introducing broker is 12
months from the date of the objection memo. In all other pending cases of
company objections bearing a date prior to 16th July, 1996, the validity period
will be as per rules‑of the respective exchanges‑as existing prior
to 16th July, 1996.
98. Objections must be accompanied with Share Certificates.
99. Shares lodged for transfer after book
closure (but before one year from the date of date stamping the transfer deed)
are returned under objection can be lodged as company objection.
100. Where the shares have been duly
transferred by the company in the name of the transferee, and thereafter the
company sends a letter informing the transferee that the shares have been
transferred based on fraudulent documents, such case can be lodged as company
objection subject to the following conditions and procedure:
·
In
cases where the company has transferred certificates which are fake and later
sends a letter informing that the shares have been transferred on fraudulent certificates,
such cases will NOT be treated as company objections and the company will be
responsible for the transfer.
·
In
cases where the shares are under stop transfer, stay order, non‑transferable
lock‑in period) or shares are partly paid and the company has transferred
the shares and later sends a letter informing that the shares have been
transferred on fraudulent documents, such cases will NOT be treated as company
objections and the company will be responsible for the transfer.
·
In
cases where the certificates are genuine but the transfer deed is forged (i.e.,
the company has transferred the shares in good faith), the shares can be
accepted as company objection. In such cases the company should necessarily
enclose the copies of both sides of the transfer deeds based on which shares
were transferred by the company in favour of the holder and which later on has
been found to be based on forged documents, and all subsequent transfers
thereafter along with the objection.
Procedure :
·
In
order to simplify the understanding of the procedure the following illustration
has been used:
A ® B ® C ® D ® X ® YZ
The shares were first sold
through 'A' in the market. After passing through 'B' and 'C' the shares were
lodged by 'D' to the company for transfer. After receiving the shares duly
transferred from the company in his name 'D' sold the shares in the market.
These shares after passing through X and 'Y' are finally sent by 'Z' to the
company for transfer in his/her name. After receiving the shares from the company
duly transferred in his name, 'Z' has received a letter from the company
stating that the shares transferred in the name of 'D' were based on fraudulent
documents.
·
'Z'
will report the objection along with the company objection against 'D'.
·
'D'
will rectify/replace the shares within 21 days as per the BDC procedures.
·
•
'D' may in turn lodge the bad delivery for rectification through the BDC
against 'A'.
The validity period of
reporting such cases will be 36 months from the date of latest transfer by the
company (in the above example 36 months from the date the shares were
transferred in the name of 'Z').
The company will also
furnish copies of both sides of transfer deed based on which shares were
transferred in favour of 'Z' and 'D' along with the objection memo].
101. In case of joint holding, and in the event
of death of any of the holders, transfer can take place on the basis of death
certificate accompanying the transfer deed only for a period of two years from
the date of the death or ensuing book closure, whichever is later.
The Introducing member of a
recognised Stock Exchange may certify/attest copy of the death certificate and
also issue an identity certificate in case where the name of the deceased on
the share certificate is not identical with the name on the death certificate -
Good.
102. While rectifying objections due to
signature differences, a fresh signature by the transferor (if the same
transfer deed is re‑submitted) along with attestation is mandatory. Fresh
transfer deed is mandatory if objection is rectified after book closure date.
103. In case Rights/Bonus shares tendered as
corporate benefits are reported as bad delivery, if it is odd lot, the value of
shares based on the rate prevalent on the day of reporting bad delivery will be
paid.
104. Rectification/replacement of transfer deed
under objection should be in market lot only (even if transfer deed under
objection is submitted in non market lot).
105. If Jumbo transfer deed is submitted as
company objection, original transfer deeds need not be returned by the
receiving member.
106. When documents are returned under
signature difference, the transfer deed can be attested by the introducing
member. If the introducing member is a corporate, the Director or authorised
signatory can attest the transfer deed, under his company's stamp, with SEBI
Registration Number.
107. For reporting as company objections, the
transferee portion of the transfer deed should be duly filled in.
108. For reporting fake/forged shares as company objection, the
following documents are required:
A. If they are returned as objection from
the company due to the above reason :
§
company
objection memo stating that the shares are fake/forged
§
copies
of both sides of the transfer deeds
§
copies
of both sides of the share certificates.
B. Otherwise one of the following documents are required :
·
public
notice given by the company/registrar
·
notification
from any stock exchange
·
letter
of intimation from the company to stock exchange.
109. The following addition has been made under clause 109:
In cases where duplicate
shares have been issued to a third party under the provisions of section
108(1)A of the Companies Act, the company should also provide the name and
address of the third party to whom the duplicate shares have been issued along
with the date of request for duplicate shares by the third party.] Now amended
clause 109 stands as under:
109. or reporting missing/lost/stolen shares as
company objection, the following documents are required :
A. If they are returned as objection from the company due to
above reason:
§
Company
objection memo stating that the shares are missing/lost/stolen accompanied by a
copy of court order or FIR or copy of acknowledged police complaint.
§
Copies
of both sides of the transfer deeds
§
Copies
of both sides of the share certificates.
B. Otherwise one of the following documents are required:
·
Public
notice given by the company/registrar
·
Notification
from any stock exchange
·
Letter
of intimation from the company to stock exchange.
All companies listed on
stock exchanges are required to do the processing of share transfers and effect
transfers in accordance with the provisions of the Companies Act, 1956, listing
agreement and the guidelines issued by SEBI. It has been observed that there
are no uniform procedures or practices adopted by companies and their
registrars to issue ('RTI')/share transfer agents ('STA') for handling and
processing of transfer documents/bad delivery documents/stock invests, etc.,
resulting in avoidable confusion and inconvenience to the investors. The Stock
Exchange, Mumbai and National Stock Exchange had set up task forces to evolve
uniform norms in these areas. The task forces submitted their recommendations
to SEBI. SEBI thereafter convened meetings of representatives of Registrar
Association of India, stock exchanges, clearing corporation, depositories and
custodians to finalise these norms. After detailed de‑liberations uniform
guidelines to be followed by RTI/STA and Companies have been agreed upon by the
various market intermediaries. These guidelines have been divided into three
parts:
1. General norms for processing
of documents.
|
Sr. No. |
Procedure to be followed
by companies/STAs |
|
01. |
The company/STA shall issue
receipt/acknowledgement in the prescribed format as per Annexure 1 in favour
of the transferee of receipt of transfer documents in its office and post it
to the transferee, latest within 7 working days of its receipt at the address
mentioned on the Transfer deed/s. |
|
02. |
The company/STA shall use the prescribed format of
covering letter as per Annexure 2 for returning shares under objection and
furnish relevant details/enclosures, as stated in Annexure 3. Covering letter and objection memo must be printed
on the letter head/stationery respectively of either the concerned company
or its STA. |
|
03. |
Objection memo must bear a unique serial number
issued between two book closure dates. |
|
04. |
The company/STA must affix date receipt stamp of
the company/STA on transfer deed/s returned with the objection memo. |
|
05. |
The company/STA shall return the share
certificate/s and transfer deed/s alongwith the objection memo within the
prescribed time of I month of receipt of transfer documents, as stipulated
in the Listing Agreement. The responsibility for any delay in this regard by
the company/STA, whereby the rights of the transferee are affected, shall
solely rest on the company/STA. Where the signature of the transferor tallies
with the records of the company/STA, the company/STA shall normally transfer
the shares within 7 working days of the Board meeting/Transfer Committee
meeting/Approval by the official authorised to transfer shares and in any
case within a period not exceeding 30 days. In case the shares are not
transferable, the same should be returned under objection within the above
stated period. |
|
06. |
Any disputes arising out of any matter, and/or
delay relating to registry/non‑registry of transfer, between/or among
company and the transferee/transferor/holder in due course/ stock exchange
member, shall be subject to the provisions of arbitration/dispute resolution
mechanisms available with the Stock Exchanges. |
|
07. |
The company/STA shall scrutinise the transfer
documents in its totality and send objection memo by marking whatever are
the defects observed in such documents, duly attaching all documents as
detailed in general guidelines 18 to 21 hereunder, and advising the
transferee/s and/or transferor/s to ensure due rectification in the manner
guided by the company/STA, while resubmitting the document. |
|
08. |
It shall not be competent for the company/STA to
raise additional objections on rectified document where the rectification in
the manner guided by the company/STA is carried out by the
transferor(s)/transferee(s) and, which ought to have been observed at the
first instance, while releasing the objection. However, in case, subsequent
to the last rejection of transfer, if additional facts have emerged for
rejection of transfer, the company/STA may reject transfer once again. |
|
09. |
Where the shares certificates bear fully paid
stickers for allotment/call money paid genuinely affixed, the company or the
STA shall not impound such certificates when they are lodged for transfer on
the pretext that all6tment/call money has not been realised. The company/STA
shall proceed to transfer such shares as if 'fully paid up'. |
|
10. |
The company/STA shall despatch the share
certificate/s issued under Stockinvest, after realisation of the stockinvest.
Company/STA shall list all shares with the stock exchanges with the
qualification "all shares despatched except shares allotted under
stockinvest, which would be despatched on realisation of stockinvest". |
|
11. |
The company/STA shall ensure to use adequate
security marks on the certificates, with stationary control number, approved
quality of security paper for printing of the certificates and approved size
of the certificates, in order to detect fake certificates and minimise
possibility of printing/introducing fake certificates. |
|
12. |
Pre‑printed uniform format stickers of good
quality shall be used by all the company/STA for endorsement of
allotment/call money payment and endorsement of holders name on the
certificatels after transfer. Such stickers shall either be signed in hand or
through pre‑printed signature by the company/STA. The information to be
provided on the sticker shall include date, transfer no., folio no., names, initial/signature
of the authorised signatory and thereafter to be intimated to all stock
exchanges where the security is traded. |
|
13. |
Defaced certificate must be kept in custody of the
company/STA and disposed of in the manner as provided in the Rules pertaining
to issue of share certificates, authorized by the Board of the company. |
|
14. |
Fake/forged/stolen certificates or certificates
where duplicate certificate is issued, must be seized and defaced by the
company/STA and disposed of in the manner, authorised by the Board of the
company. |
|
15. |
The company/STA shall submit a report in the
prescribed format as per Annexure 4 to all the stock exchanges where traded,
as on the last date of every quarter, relating to certificates found to be
missing/lost/stolen/other category shares, which are non transferable and
particulars relating to embargo on transfer/fake certificates. The company
shall submit a report duly certified as per clause 47C of Listing Agreement
with the stock exchanges. |
|
16. |
Where value of shares is less than Rs. 1000 based
on the closing price on the date of issue of company objection memo at any
one of the recognised stock exchange, and the sign of the transferor differs
with the records of the company/STA, the companies/STAs may follow a simplified
procedure for transfer as used for minor sign difference cases, after giving
due notice to seller. |
|
17. |
Company objections issued by companies/STAs for
the reason of sign differs shall necessarily have the following documents :
|
|
18. |
Companies/STAs to retain copy/ies of transfer
deed/s where the signature/s of the transferods does not tally with the
specimen signature/s registered in the records of the company/STA. This is to
facilitate issue of company objection memo together with copies of transfer
deeds, in case the original set of documents returned under objection
earlier, may been lost in transit. The transferee would be in a position to
lodge the objection against the relevant introducing member as per. the
provisions provided under guidelines No. 9 of the objection norms. |
|
19. |
Company objections issued by companies/STAs for
the reason of 'fake shares/forged endorsements on certificates' shall
necessarily be accompanied with the following documents:
|
|
20. |
Company objections issued by companies/STAs for
the reasons of 'missing/lost/stolen/ transferred on basis of forged transfer
deeds' shall necessarily be accompanied with the following documents:
Alternatively, company/STA
may also issue:
Note : In the absence of valid police
complaint/FIR/court order/copy of plaint filed in the court alongwith the
case No., company/STA shall not issue an objection and Company/STA shall
necessarily demand such document from the person lodging the complaint for
stopping transfer or reporting missing/loss/stealing of‑securities. In case duplicate shares have already been issued,
date of issue of duplicates, and name and address of the person to whom
duplicates have been issued and copy of indemnity bond based on which
duplicates were issued, are to be provided. |
|
21. |
Company objections issued by companies/STAs for
'stop transfer for reasons other than missing/lost/ stolen/fake/forged
shares' shall necessarily be accompanied with the following documents:
Copy of FIR/police complaint/court injunction
order/copy of plaint filed in the court along with the case which shall
necessarily mention the date on which the cause of action has arisen, DNRs
and certificate Nos. Note : In the absence of valid police
complaint/FIR/court order/copy of plaint filed in the court along with the
case No., company/STA can not issue an objection and Company/STA shall
necessarily demand such document from the person lodging the complaint for
stopping transfer or reporting missing/loss/ stealing of securities. If value of shares is less than Rs. 5,000, based
on the closing price at any one of the recognised stock exchanges, as on the
date of intimation of loss, company/STA may not insist on a court case. |
|
22. |
Wherever value of loss of shares as on the date of
execution of indemnity/affidavit is less than Rs. 10,000, reckoned on the
basis of the closing price at any one of the recognised stock exchanges, the
company may not insist on levying advertisement expenses for loss of shares
on the original holders. The company/STA shall necessarily obtain the
following documents duly executed by the claimant, prior to issue of
duplicate shares to him: Indemnity for issue of duplicate share
certificate/s in the name of the person, in whose name the duplicates are
being issued that he has not sold/disposed of the involved shares or acted in
any manner by which any interest of third party would have been created, as
per the applicable Annexure as detailed here under:
Final court order for issue of duplicate shares
required in case of a third party stop transfer ('third party' does not
include genuine bonafide transferee). |
|
23. |
Company/STA to: (i)
inform all the stock exchanges where the shares are traded regarding
the loss of shares in lieu of which duplicate shares are being issued, if not
already informed (ii)
issue an advertisement in a widely circulated newspaper if the value
of the shares is greater than Rs. 10,000. In case the company/STA issues duplicate share
certificate based on any other documents, then the company/STA shall be
solely responsible for the issue of such duplicate share certificates. |
|
24. |
Where the deals/transactions are done through the
trading, clearing and settlement system of the stock exchanges, any complaint
for non‑receipt of payment by the investor from his broker/sub‑broker/
purchaser shall lie only with the investor grievance cell of the respective
stock exchange for redressal. The company/STA shall not take cognizance of
any such complaint while processing the transfer but shall advise such
complainant to approach the relevant stock exchange, at which the investor
had transacted the deal through their SEBI registered broker/SEBI registered
sub‑broker, with the complaint. |
|
25. |
For any court cases filed by any individual/entity
in any court for 'stop transfer' of shares, on which third part claim
subsists, the company/STA shall, without fail and exception, file an
appropriate affidavit categorically specifying therein about the third party
interest/right having already been created and pleading necessity of having
criminal proceedings for the reason of third party interest/right already
existing. If the company/STA chooses not to file affidavit as above, the
company/STA shall be directly responsible and accountable for indemnifying
the TPC. The company is required to compulsorily intimate the registered
holders of the court case instituted with respect to the shares. |
|
26. |
In case the company/STA has effected transfer and
dispatched either (i)
fake share certificate/s or certificates with forged last transfer
endorsements or (ii)
transferred missing/lost/disputed/stolen shares despite a FIR/police
complaint/court injunction order, even if it was inadvertently, it shall not be competent
then for the company/STA to raise an objection memo, subsequently. In such an
event, the company/STA shall make necessary arrangement of procuring
identical quantity of shares, bearing good title, from the open market to be
handed over to the transferee duly transferred in his name, as if such
procured shares were lodged for transfer by the transferee, within a period
not exceeding 60 days from the date of an error or omission detected by the
company/STA, along with all benefits accrued thereon, from the date of lodgment. |
|
27. |
The company/STA shall not mark any shares under
'stop transfer' for reason other than 'missing/lost/stolen' shares (provided
accompanied with valid documents), except if the 'stop transfer' is on
account of a court case where suit No. has been given/police complaint/FIR,
which shall necessarily mention the date on which the cause of action has
arisen, along with DNRs and certificate Nos. |
|
28. |
Where the signature of the transferor tallies with
the records of the company, the company/STA shall transfer the shares within
15 working days. |
|
29. |
To give effect to the requirements relating to
transfer/objection norms and to safeguard and protect the interest of the
company, the company shall seek appropriate insurance cover towards the risk
arising out of the requirements contained as aforesaid. |
|
30. |
Non‑compliance of any of the norms contained
in the "General norms/Transfer norms/Objection norms (for companies/STA)
shall render the company/STA liable for disciplinary action by any one or
more of the stock exchanges where the security/ies of the company is/are
listed and/or by SEBI, and shall not affect the validity of the documents. |
2. Norms for processing of
transfers
TRANSFER
NORMS (FOR COMPANIES/STAs)
A. Transfer Deed
|
Sr. No. |
Description |
Can company/STA return as
company objection |
|
1. |
Transfer deed endorsed by the prescribed authority
on a date prior to closure of the register of members of the company but
delivered after the date of closure of register of members, but within a
period of one year from the date of presentation. |
No. |
|
2. |
Transfer deed without endorsement by the
prescribed authority. |
Yes, except for debentures, warrants and units of
mutual funds other than units of UTI. |
|
3. |
Transfer deed/s with alterations, corrections or
overwriting in the material portion authenticated by the transferor/s and/or
transferee/s and/or by the introducing member on behalf of the transferor/s,
for the details to be filed in the Transfer deed. |
No. |
|
4. |
Transfer deed with abbreviated name of a company
filled up. |
No. |
|
5. |
Transfer deed with signature of the transferor is
in an Indian language other than the scheduled languages of India (English,
Assamese, Bengali, Gujarati, Hindi, Kannada, Kashmiri, Malayalam, Marathi,
Oriya, Punjabi, Sanskrit, Tamil, Telugu and Urdu) or when the transferor has
affixed his thumb impression. |
No, if attested by any person authorised to attest
signatures under the seal/stamp of his office and if the signature matches
with the specimen signature ayailable with the company/STA. |
|
6. |
Transfer deed bearing signature with apparent
difference such that M Dhar signing as M Shah. |
No, if tallies with the specimen signature. |
|
7. |
Transfer deed signed by the transferor where
signature is clearly of a person different than the name of the transferor. |
No, if tallies with the specimen signature. |
|
8. |
Transfer deed is signed by two different
shareholders under two different transfer deeds, however the signatures in
both the transfer deeds are same. |
No, if tallies with the specimen signature/s. |
|
9. |
Transfer deed in respect of joint holdings signed
by all the joint holders in any order. |
No, if tallies with the specimen signature/s. |
|
10. |
Transfer deed signed by an authorised signatory
under power of attorney. |
No, if PA registered with the Company and
signature tallies with the specimen signature/s. |
|
11. |
Transfer deed signed by sole proprietor or partner
in case of sole proprietorship or partnership firm respectively. (Applicable
only if already registered as holders in the company/STA records). |
No, if tallies with the specimen signature/s. |
|
12. |
Transfer deed having transferor's signature in
facsimile mode. |
No, in case of authorisation by registered
custodians to the company/STA to transfer shares on the basis of facsimile
signature (as per format Annexure 6). |
|
13. |
Transfer deed with name and address of witness
either not given. |
Yes. |
|
14. |
Transfer deed where witness name, address in a language
other than specified by the Ministry of Finance, under (12) above (other than
English, Assamese, Bengali, Gujarati, Hindi, Kannada, Kashmiri, Malayalam,
Marathi, Oriya, Punjabi, Sanskrit, Tamil, Telugu and Urdu) |
|
|
15. |
Transfer deed where witness and attesting
authority of transferor/s signature are the same. |
No, if tallies with specimen signature/s. |
|
16. |
Transfer deed bearing address of witness of a city
other than the city of which transferor address relates to. |
No, if tallies with specimen signature/s. |
|
17. |
Transfer deed bearing initials of witness,
alongwith name and address. |
No, because the initials itself may be the full
signature of the witness. |
|
18. |
Transfer deed bearing the rubber stamp of the
delivering member with the details as prescribed, not affixed on the reverse. |
No, if signature tallies with specimen
signature/s. |
|
19. |
Transfer deeds exceeding 5 in number in a
marketable lot or single transfer deed used for a large no. of certificates
held by the same transferor, with the details of DNRs/certificate, nos. given
as an annexure. |
No, if signature tallies with specimen
signature/s. |
|
20. |
One transfer deed used for a market lot with the
same transferor, but with more than one register folio No. |
No, if name of the transferor/s are identical on
all the certificates and if signature tallies with specimen signature/s. |
B. Share Certificate
|
Sr. No. |
Description |
Can company/STA return as
company objection |
|
21. |
Share certificate torn defaced or mutilated in
material portion. Material portion includes name of the company,
allotment/call money endorsement, certificate and distinctive Nos., folio
No., name of the holder(s), authorised signatory and common seal. |
No, as long as the identity of the certificate is
established transferee must be issued new share certificate/s in lieu of torn
certificate and torn share Certificate /s must be simultaneous-ly defaced with
rubber stamp on torn certificate/s stating "New share certificate/s
issued" |
|
22. |
Share certificate standing in the name of a trust
(applicable only if already registered in the company/STA records). |
No, if signature tallies with specimen
signature/s. |
|
23. |
Share certificate containing lock‑in period
but no specific date of release of lock‑in period stipulated thereon. |
Yes. Further, where lock‑in period as
prescribed by SEBI is not over, company/STA must affix a sticker on the
relevant certificate/s, stipulating such period as pre scribed for the
purpose and issue an objection memo. In case the lock‑in‑period
is over, the company/STA may proceed to transfer the shares |
|
24. |
Share certificate without endorsement by the
authorised signatory of the company for effecting transfer on the reverse. |
No, if already registered in the name of the
transferor as per the company/STA records |
|
26. |
Two or more share certificates having the same
certificate Nos. but different DNRs. |
No, if signature tallies with specimen signature/s
of the transferor. Company/STA to retain the erroneous certificate and to
issue fresh certificate with correct details. |
|
27. |
Share certificate with sticker affixed on the
reverse of the certificate, where the details pertaining to the certificate
No. and/or distinctive no given on the sticker do not match with the
corresponding details on the face of the certificate and where the name of
transferor matches with the registered holder. For example on the face of the
certificate No. is 12345 and on the reverse is 67891. |
No, company/STA to cancel old sticker and affix a
fresh sticker with correct details on the certificate. Company/STA to also
transfer the shares in the name of the transferee if signature of transferor
tallies with specimen signature/s. |
|
28. |
Share Certificate with
overwriting/correction/erasure on the reverse of the certificate in more than
two characters in case of the last transfer endorsement. |
No, if signature of transferor tallies with the
specimen signature/s. |
|
29. |
Share Certificate having irrelevant or extraneous
stamps whether affecting material portion or not. |
No, but the transferee must be issued new share
certificate/s in lieu of old certificate/s and the old certificate/s must
be simultaneously defaced with fibber stamp on such certificate/s stating
"new share certificate/s issued".’ |
|
30. |
Share certificate bearing the previous name and/or
address of the company |
No, but the company/STA must : (i)issue new share certificate/s in lieu of the
old certificate’s and such old certificate/s must be simultaneously defaced
with rubber stamp on such certificate/s starting "new share
certificate/s issued", or (ii)Affix a pre‑printed sticker/ rubber
stamp with new name (address of the company, and forward the same to the
transferee. |
|
31. |
Share certificate where endorsement is done prior
to registering the transfer and the documents are otherwise not in order. |
Yes, but the transferee must be sent new share
certificate/s, issued in lieu of the original certificate/s lodged, standing
in the name of the last registered holder (transferor) along with an objection
memo. The old original certificate/s must be simultaneously defaced with
rubber stamp on such certificate/s stating "new share certificate/s
issued". |
|
32. |
Share certificate with call notice where the last
date for payment of call has expired and the call has not been paid. |
Yes, if the terms of issue so provide. |
|
33. |
Share certificate where the call receipt for
having paid the call not attached. |
No. If from the records of the company such call
money has been received, the company to endorse the same on the certificate. |
|
34. |
Share certificate where the call payment receipt
with the stamp of the Bank before or on the due date is not attached. |
No. If from the records of the company such call
money has been received, the company to endorse the same on the certificate. |
|
35. |
Share certificate with application receipts and
call money receipts not bearing bank stamps and payment details. |
No. If from the records of the company such call
money has been received, the company to endorse the same on the certificate. |
|
36. |
Share certificate with call payment made after the
due date and not endorse as 'cheque/draft realised' by the
bank/company/registrars. |
No. If from the records of the company such call
money has been received, the company to endorse the same on the certificate. |
|
37. |
Share certificate where the call money paid but
not endorsed even after the book closure. |
No. However, endorsement of call money paid must
be made by the company/STA, instantaneously. |
|
38. |
Company has endorsed the share certificate as
'fully paid' but later says that it is partly paid. |
No. The company shall transfer the shares, as if
'fully paid'. However if such endorsement is forged, the shares may be
returned under objection to the transferee. |
|
Sr. No. |
Description |
Can company/STA return as
company objection |
|
39. |
If the name of the transferor(s) in the share
certificate and the name in the transfer deed(s) differs materially (appears
as two different names)
|
No, if alterations/corrections are attested by the
introducing member, on the transfer deed and if signature of the transferor
tallies with the specimen signature/s. |
|
40. |
Spelling mistakes in the name of the company,
number of shares and name of the transferor on the transfer deed and not
resembling the word stipulated in the share certificate, as enumerated below:
|
No, if alterations/corrections are attested by the
introducing member, on the transfer deed and if signature of the transferor
tallies with the specimen signature/s. |
|
41. |
Transfer deed signed as 'Chunilal' whereas the
name in the/ share certificate is 'MOTILAL". For example Name on Signature on Certificate
transfer deed • Preeti Devi Preeti
Goyal Good • Preeti Jain Preeti
Shah Good |
No, if the signature of the transferor/s tallies
with the specimen signature/s. |
|
42. |
Share certificate contains one name and transfer
deed consists of two different signatures of the same transferor/s. |
No, if one or more of the signatures of the
transferor/s tallies with the specimen signature/s. |
|
43. |
Where the share certificate is held in joint names
and in the event of death of any of the holders, transfer deed is signed by
the surviving holder/s. |
No, if photocopy of the death certificate duly
attested is attached to the transfer deed. Death certificate in any language as per Schedule
VIII of the Constitution of India is valid. In case the company doubts the genuineness of the
death certificate, company should give a seller notice for sale confirmation
within 15 working days. If no confirmation received, company to proceed with
transfer. |
|
44. |
Share certificate standing in the name of the HUF
but transfer deed signed by any person on behalf of HUF. |
No, if signed by Karta. |
|
45. |
Share certificate standing in the name of a trust
and signed on the transfer deed. as 'name of trust proprietor /trustee'. |
No |
|
46. |
Units standing in more than one name with terms
"either or survivor' and transfer deed signed only by one holder. |
Yes |
|
47. |
Units standing in more
than one name with terms "either or survivor', Transfer deed signed by
the holders and signature of one of the holders not tallying with the
specimen signature. |
Yes |
|
Sr. No. |
Description |
Can company/STA return as
company objection |
|
48. |
Where the transferee has lodged more than one
share certificate accompanied with a Jumbo transfer deed, and if any one or
more of such certificates not found in order. |
Yes, only such certificate/transfer deed/s as not
found to be in order. The company shall proceed to transfer the other
certificates with good title. |
|
49. |
Where the transferee has
lodged more than one share certificate, having the same and/or different folios but the
name of the transferors are the same and in the same sequence and accompanied
by a single transfer deed, together with other supporting transfer deeds duly
signed by the transferors and filled in the details of the transferee/s as
required. |
No, if the signature of the transferor tallies
with the specimen signature/s. |
|
Sr. No. |
Description |
Can company/STA return as
company objection |
|
|
01. |
Minor difference in sipature/s of transferor/on
the transfer deed/s vis-à-vis specimen signatures recorded with the
company/STA |
To send to the first transferor an intimation as
per Annexure 5, of the afore-said defect in the documents, and in form the
transferor that objection, if any, of the, transferor supported by valid,
proof is not lodged with the company/STA within 15 calendar days of receipt
of letter of the company/ STA, as the case may be, then the securities will
be transferred by the company/STA, without further reference. |
|
|
02. |
Signature in a different language on the Transfer
deed/s vis‑a‑vis specimen signature recorded with the
company/STA. |
To send to the transferee an objection memo along
with documents as per general guideline No. 18, with the qualification of
'signature of transferor as per the records of the company/STA is in a
language different from that on the transfer deed'. Alternatively, the
company/STA may specify the language in which the transferor has signed as
per their records. |
|
|
03. |
Material difference in signature/s of transferors
on Transfer Deed/s vis‑a‑vis specimen signatures record-ed with
the company/ STA |
To send : 3.1 Objection memo along with documents as per
General guideline 18, in the prescribed format in original marking the
reason as "material signature difference" to the transferee. 3.2 Simultaneously, send a copy of the objection
memo to the transferors with an advice to lodge documents as detailed
hereunder to facilitate the company/STA to take on record fresh specimen
signature. 3.2.1 An affidavit with the company/STA as per
Annexure 07, or 3.2.2. Where the signature difference is due to
old age/sickness, to lodge an affidavit as per Annexure 07 supported with a
medical certificate obtained from a registered medical practitioner. Note : Procedure under 3.2.1 and 3.2.2. above
shall apply for recording fresh specimen signature for entire holding under a
folio. |
|
|
04. |
Share certificate/s found to be fake/bearing
forged endorsements lodged for transfer with the company/ STA |
To send to the transferee objection memo in the
prescribed format in original making the reason as "Share certificate/s
found as fake/forged", along with documents as per general guideline 19. |
|
|
05. |
Share certificate reported to be missi
-ng/lost/stolen by registered holder/s and subsequently not transferred, or
subsequently lodged for transfer by a transferee |
5.1 When a request for 'stop transfer' is received
by the company/STA from the registered holder/s, company/STA to first verify
the signature of the registered holder/s on specimen signature/s in the
records of the company/STA. 5.2 If the signature of the registered holder on
the 'stop transfer' instructions is in order, company/STA to (i)
record caution immediately on the certificate/s involved; and (ii)
give notice to the registered holder to produce any of the following,
which should necessarily mention the date of loss, distinctive Nos.,
certificate Nos. within 21 calendar days of intimation of loss by them: ·
Copy of FIR, or copy of acknowledged police complaint, or copy of an
injunction order passed by a court of competent jurisdiction or copy of
plaint along with confirmation that the suit filed has been accepted by the
court and suit No. has been given, which shall necessarily mention the date
of loss, distinctive Nos. and certificate Nos. of share certificates lost,
duly lodged by the registered holder. ·
An affidavit executed before a First Class Magistrate or notary
public affirming that the involved share have not been sold (Annexure 08) 5.2.1 If the documents as per 5.2 above are
satisfactory, company/ STA to- (i)
immediately inform all the stock exchanges where shares are traded,
regarding loss reported by the registered holder upon receiving any one of
the documentary proof, 5.2 from the registered holder. (ii)
Issue advertisement for loss of share certificates at the cost of
claimant (iii)
issue duplicate certificate as per general guideline No. 23 5.3 If the said certificate are lodged with the
company/STA for transfer, after 'stop transfer' instructions received from
the registered holder, company/STA to confiscate the share
certificate/transfer deeds received for transfer. 5.4 Company/STA to issue objection memo in the
prescribed format in original to the transferee, who has lodged the 'stop
transfer' shares for transfer, marking the reason as "share
certificate/s found as missing/ lost/stolen" alongwith documents as per
5.2 and General guideline Nos. 6 and 20. |
|
|
06. |
Stop transfer instructions by previous registered
holder/s after share certificates have been transferred by the company in the
name of a subsequent holder/s, based on the original transfer deed or share
certificates transferred by company/ STA based on forged transfer deed
believing the signature of the transferor/s (previous registered holdeds) to
be genuine, and later detected to be forged, and subsequently, complaint of
loss of share certificate made by the previous Registered holder/s. |
6.1 When a request for 'stop transfer' is received
by the company/STA from the previous registered holder/s, com pany/STA to
first verify the signature of the registered holder/s on the 'stop transfer'
instructions with the specimen signature/s in the records of the company/STA.
6.2 If the signature of the previous Registered
holder on the 'stop transfer' instructions is in order, company/STA to- (i)
record caution immediately on the certificate/s involved; (ii)
to give notice to the registered holder to produce any of the
following, which should necessarily mention the date of loss, distinctive
Nos., certificate Nos. within 21 calendar days of intimation of loss by them: ·
Copy of FIR, or copy of acknowledged police complaint, or copy of an
injunction order passed by a court of competent jurisdiction or copy of
plaint along with confirmation that the suit filed has been accepted by the
court and suit No. has been given, which shall necessarily mention the date
of loss, distinctive Nos. and certificate Nos. of share certificate lost,
duly lodged by the registered holder. ·
An affidavit executed before a first class Magistrate or notary
public affirming that the involved share have not been sold (Annexure 08) 6.2.1 If the documents as per 6.2 above are
satisfactory, company/ STA to- (i)
give notice to the last holder to surrender the share certificates by
way of a registered AD letter, within 21 calendar days. The notice should
necessarily mention the details of the claim by the previous registered
holder; (ii)
send objection documents as per general guideline 20 to the last
holder, within 14 calendar days of surrender of share certificate/s by the
last holder, facilitating him to make a claim with the concerned broker from
whom the documents were received against purchase; (iii)
immediately inform all the stock exchanges where shares are traded,
regarding loss reported by the registered holder upon receiving any one of
the documentary proof, under 6.2 above, from the registered holder; (iv)
issue advertisement for loss of share certificates at the cost of
claimant; (v)
issue duplicate share certificate to the claimant (previous
registered holder) as per general guideline No. 23. 6.3 If share certificates are not surrendered
despite notice, company /STA to cancel such share certificates after giving a
final notice to the last holder. |
|
|
07. |
Share certificate/s reported to be
missing/lost/stolen by the third party claimant (i.e, holder in due course or
beneficial owner or unregistered transferee) and sub‑sequently not
transferred or subsequently lodged for transfer by a transferee. |
7.1 To record caution immediately on the
certificate/s involved. 7.2 To give notice to the third party claimant
(TPC) to produce to the company/STA, the following documents within 30
calendar days from the date of intimation of loss by the TPC, which shall
necessarily mention the date of loss, distinctive Nos., certificate Nos.
7.3 The requirement of a court order may not be
insisted on by the company/STA, at their discretion, in case copy of police
complaint/FIR is provided for loss of share certificates by financial
institutions, SEBI registered Foreign institutional investors, SEBI
registered mutual funds, RBI registered banks and SEBI registered stock
exchanges, who have also provided an indemnity to the company/STA for the
quantity of share certificates lost. 7.4 If the documents as per 7.2 above are
satisfactory, company/ STA to- (i)
inform the last registered holder of the claim for loss of share
certificates by the TPC (ii)
immediately inform all the stock exchanges where shares are traded,
regarding loss reported by the TPC. (iii)
issue advertisement for loss of share certificates at the cost of
claimant (iv)
issue duplicate share certificate to the claimant (previous
registered holder) as per general guideline No. 23. 7.5 If the share certificates are lodged by a
transferee with the company/STA for transfer after intimation of 'stop
transfer' request by the TPC, company/STA to confiscate the original share
certificate/transfer deed and to issue objection memo and send documents as
per 7.2 above and general guideline 6 and 20 to the transferee, facilitating
him to make a claim with the concerned broker from whom the documents were
received against purchase. |
|
|
08. |
Stop transfer instructions by the third party
claimant (i.e., holder in due course or beneficial owner or unregistered
transferee) after share certificates have been transferred by the company in
the name of a subsequent holder based on the original transfer deed. Or share
certificates transferred by company/ STA based on forged transfer deed,
believing the signature of the transferor to be genuine, and later detected
to be forged, and sub-sequently, complaint of loss of share certificates made
by the third party claimant. |
8.1 To follow procedure"as per 7 above. 8.2 Additional requirements: 8.2.1 Company/STA to immediately give notice to
all the holder/s after the date of loss, and the last holder to surrender
the share certificates, within 21 calendar days, by way of a registered AD/
courier/hand delivery, on receipt of documents as per (7.2), in case the
share certificates have been transferred after the date of loss by claimant. 8.2.2. Company/STA to send objection documents as
per guideline 20, to the last holder, within 14 general calendar days of
surrender of share certificate/s by the last holder facilitating him to make
a claim with the concerned broker from whom the documents were received
against purchase. 8.2.3 The notice should necessarily mention the
details of the claim by the TPC. 8.3 If share certificates are not surrendered,
despite notice, the same should be marked as cancelled after giving a final
notice to the last holder and company/STA to issue duplicate share certificate
to the claimant as per general guideline No. 23. 8.4 If the share certificates are lodged. by a
transferee with the company/STA for transfer, company/STA to confiscate the
original share certificate/transfer deed and to issue objection memo in the
prescribed format in original to the transferee as per general guideline 2,
if the company/STA is satisfied from the documents (as per 7.2) received from
the TPC not to process transfer. The company/STA shall forward alongwith the
objection memo documents as per general guideline No. 20. |
|
|
09. |
Share certificates returned under objection/duly
transferred by the company/ STA to the transferee and lost in transit A. Transferor 5B 65 C. Transferee Lost in transit 65 sent for transfer sent to C 65 Company ®®® Transfe-rred shares/
objection |
With respect to shares while being returned by
the company under objection are lost in transit, the following standard
procedure has been devised for providing a solution to the transferees. 9.1 Where the original share certificates and
transfer deeds are returned under objection by the company/STA but not
received by the transferee (C). Subsequently, C gives an intimation of non
receipt of share certificate/s objection documents to the company/ STA: 9.1.1. company/STA to seek confirmation of
delivery or non‑delivery by the post office and company/STA to lodge
wherever possible FIR/police complaint for share certificates lost in transit
and mark the share certificate under 'stop transfer'; 9.1.2 company/STA to issue a notice to all stock
exchanges where the shares are traded, of share certificates having been
lost; 9.1.3 company/STA to provide the following documents to C for seeking relief through the stock exchange mechanism:
9.2 C would be required to approach the stock
exchange within 18 months from the date of first objection memo. 9.3 The stock exchanges would be required to
devise a mechanism through their respective BDC/Dispute Resolution
Committees/ Arbitration Committees to ascertain the identity of the first
introducing member on their exchange by following the reverse chain of members
who have delivered the shares on the exchange. After the first introducing
member has been identified, the procedure detailed hereunder shall be followed: 9.3.1 Receiving member to lodge as objection
against the first introducing member on the exchange alongwith a NOC (as per
Annexure 14). 9.3.2 First introducing member shall be liable to
rectify the objection by procuring a fresh valid transfer deeds, duly attested
(along with the original NOC received from the Receiving member) within the
objection cycle. 9.3.3 In case of non‑rectification
consequences as applicable to non‑rectification of company objection
shall follow. 9.4 Where the first introducing member of the
exchange has received the shares from a member of another exchange, such
exchanges shall follow the same procedure as detailed above for identifying
the first introducing member responsible to rectify the objection through the
inter‑exchange mechanism and ensuring rectification/close‑out.
The validity period for such cases would be extended by one additional month,
for each subsequent lodgement on the other exchange, i.e., the subsequent
lodgement should be within a period of one month to be reckoned from the date
the objection as reported against the current reporting member. The
calculation of validity period of company objection memo would exclude the
time taken for any valid withdrawals and subsequent relodgement of the
objection. 9.5 Where the company
provides copies of transfer deeds and share certificate to C, C directly
lodge objection on the introducing member of the exchange along with:
9.6 On receipt of the rectified transfer deed,
company/STA to issue duplicate share certificates to the stated entities, as
per general guideline 23, as follows: (a)
to the transferee, along with rectified transfer deed; (b)
to the transferor, along with the NOC (Annexure 14) signed by the
transferee; (c)
to any third party claimant, along with rectified transfer deed and
the NOC (Annexure 14) signed by the transferee. 9.7 Where the original share certificates duly
transferred are sent by the company/STA to the new holder C, but not
received by him. The company/STA may issue duplicate shares to C in
accordance with General guideline 23. Note : In respect of case specific variations,
stock exchanges may adopt this procedure with modification, aimed at
providing a solution to the transferee. |
|
|
10. |
Share certificate/s being sent by a holder in due
course (HDC) for transfer in his name to the company/STA and lost in transit. A. Transferor 6 B. Transferee 1 (HDC) 6 Sent for transfer Lost in transit Notice of loss of shares sent to company by B |
With respect to shares being sent to the company
by a transferee for the purpose of transfer are lost in transit, the following
standard procedure has been devised for providing a solution to the
transferees. 10.1 Where the original share certificate/s and
transfer deed/s are being sent to the company/STA by B and lost in transit
and intimation of the same is given to the Company by B. 10.1.1 Where the shares have not been subsequently
transferred in the name of any new holder, Company/STA to give notice to B to
provide the following documents within 21 calendar days:
10.1.2 On the receipt of documents stated in
10.1.1, company/STA to seek confirmation from the transferor (A) regarding
sale of securities. On receipt of sale confirmation from the transferor,
company/STA to:
10.1.3 In case of objection raised by transferor
A, company/STA to follow procedure as per 5 above, pertaining to stop
transfer by registered holder. 10.1.4. Company/STA to provide the following
documents to B for seeking relief through the stock exchange mechanism
10.1.5. B would be required to approach the stock
exchange within 12 months from the date of objection memo. 10.1.6 The Stock Exchanges would be required to
devise a mechanism through their respective BDC/Dispute Resolution
Committees/Arbitration Committees to ascertain the identity of the first
introducing member on their exchange by following the reverse chain of
members who have delivered the shares on the exchange. After the first
introducing member has been identified the procedure detailed hereunder shall
be followed:
|
|
|
Sr. No. |
Description |
Can company/STA return as
company objection |
|
|
|
|
10.2
Where the first introducing member of the exchange has received the shares
from a member of another exchange, such exchanges shall follow the same
procedure as detailed above for identifying the first introducing member
responsible to rectify the objection through the inter‑exchange
mechanism and ensuring rectification/close‑out. The validity period for such cases would be
extended by one additional month, for each subsequent lodgement on the other
exchange i.e., the subsequent lodgement should be within a period of one
month to be reckoned from the date the objection was reported against the
current reporting member. The calculation of validity period of company
objection memo would exclude the time taken for any valid withdrawals and
subsequent relodgement of the objection. 10.3
Where the company provides copies of transfer deeds and share certificate to
B, B to directly lodge objection on the introducing member of the exchange
alongwith:
10.4 On receipt of the rectified transfer deed,
the transferee (B) to fulfil all formalities as per general guideline 23 for
issue of duplicate share certificates. Note : In respect of case specific variations,
stock exchanges may adopt this procedure with modification, aimed at
providing a solution to the transferee. |
|
|
11. |
Where the share certificates have been transferred
multiple times and stop transfer instructions for missing/lost/ stolen share
certificates/s lodged by one of the intermediate holders (IH, i.e., B) in
whose name the share certificates had been transferred, and subsequently
share certificates transferred again by the company, believing the signature
of the IH to be genuine but later detected to be forged. |
11.1
To follow procedure as per 6 above. 11.2
Additional requirements: 11.2.1
Company to determine the wrongful transfer based on forged transfer deed.
Company to send copies of all transfer deeds from the IH to the last holder,
to the last holder/transferee. Illustration: 1 2
3 4 ‑ Transfer deed No. A ®
B ® C ® D ®
E - Transfer of shares Suppose share certificates have been originally held
by A and have been transferred multiple times and have been ultimately
transferred in the name of E. At this stage, B has lodged the stop transfer. 11.2.1
Company to provide alongwith regular company objection documents, copies of
all transfer deeds for all transfer from B to E, to E/transferee (in case
share certificates lodged for transfer after E), i.e., company to send
transfer deed Nos. 4, 3 and 2. 11.3
Such company objections should be reported on the exchange separately for
each transfer deed, i.e., E should lodge against D. D would report against C.
C would report against B. 11.4
The validity period of the company objection memo for such cases would be 12
months from the date of the memo for lodgement by E against D. Thereafter,
one additional month for each subsequent lodgement would be provided, i.e.,
The validity period of the objection memo would be 13 months from the date of
memo for lodgement by D against C; similarly it would be 14 months for
lodgement by C against B and so on and so forth. Each subsequent lodgement
should be within a period of one month to be reckoned from the date the
objection was reported against the current reporting member. The calculation
of validity period of company objection memo would exclude the time taken for
any valid withdrawals and subsequent relodgement of the objection. |
|
|
12. |
Where the share certificates have been transferred
multiple times and stop transfer instructions for missing/lost/ stolen share
certificate/s lodged by a third party claimant who has purchased the share
certificates from one of the intermediate holders transfer deed. (IH) and lost
the share certificates, and subsequently share certificates transferred again
by the company. |
12.1
To follow procedure as per 8 above. 12.2
Additional requirements: 12.2.1.
Company to determine the wrong ful transfer based on forged Company to send
copies of all transfer deeds from the last holder to the holder after whom
the share certificates were lost, to the last holder/transferee. Illustration
: 1 2
3 4 ‑ Transfer deed No. A ®
B ® C ® D ®
E - Transfer of shares Suppose share certificates have been originally held
by A and have been transferred multiple times and have been ultimately
transferred in the name of E. At this stage, some TPC who has purchased the
share certificates after they were sold by B but before they were transferred
in the name of C, has lodged the stop transfer; 12.2.2
Company to provide alongwith regular company objection documents, copies of
all transfer deeds for all transfer from B to E, to E/transferee (in case
share certificates lodged for transfer after E), i.e., company to send
transfer deed Nos. 4, 3 and 2. 12.3
Such company objections should be reported on the stock exchange separately
for each transfer deed, i. e., E should lodge against D. D would report
against C. C would report against the relevant introducing member who has
introduced the share certificates after they were missing/lost/stolen. 12.4
Ile validity period of the company objection memo for such cases would be 12
months from the date of the memo for lodgement by E against D. Thereafter,
one additional month each for each subsequent lodgement would be provided
i.e., the validity period of the objection memo would be 13 months from the
date of memo for lodgement by D against C; similarly it would be 14 months
for lodgement by C against the relevant introducing member. Each subsequent
lodgement should be within a period of one month to be reckoned from the date
the objection was reported against the current reporting member. The
calculation of validity period of company objection memo would exclude the
time taken for any valid withdrawals and subsequent relodgement of the
objection. |
|
Draft of the formats to be
used have also been suggested in these guidelines. It is hereby directed that
all registered registrar to an issue and share transfer agents and companies
listed on stock exchanges shall mandatorily follow these guidelines and formats
with immediate effect. These directions are issued pursuant to powers conferred
on SEBI under section 11 B of the SEBI Act, 1992.