The Securities and Exchange Board of India (Sebi) on Friday provided some exemptions to promoters from converting their shareholding into demat form.
Sebi has said shares where the promoter has died would be exempted from such conversion. Also, cases where issue of promoter shareholding is before any court or tribunal would be exempt. Promoters that have sold their shares in physical format and have not registered for a transfer with the company are also to be exempt.
Shares allotted to promoters that await final approval for listing from a stock exchange will be given 30 days for dematerialisation. Once the exchange gives final listing approval, shares will be given 15 days to demat, Sebi said in a circular.
Sebi has set a deadline of December 31, 2011, for 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 the trade-to-trade category. Under this, all transactions have to be delivery-based and price movement will be allowed in a five per cent band.
The relaxation was approved after some companies approached Sebi to seek exemption, as they were facing difficulties while dematerialising their shares. According to the regulator, promoters of a large number of companies have already converted their shareholding into demat form.
