You Deserve Your Money back

Ban on Physical Share Transfer of Listed Co-

Last Date 31.3.2019- Problem and Solutions

Organised by
NIRC of ICAI
Wealth Recovery
This happens when one does not share
Value of Unclaimed / Physical Investment in the country is more
than Rs 6,17,317 Lakhs Crore

Stocks / Mutual
Fund : Rs. Unclaimed
5,35,000 Crores Provident Fund :
lying in physical Rs 43,000 Crores
form

Unclaimed Unclaimed Bank

Insurance : Account:
Rs 15,166 Crores Rs 11,302 Crores

Unclaimed
Unclaimed Post
Corporate
Office accounts :
Dividends :
Rs 9,395 Crores
Rs 3,454 Crores
All hassles for an Investor !!!
Does Anyone want their family to roam around from pillar to post to
claim the investment ? Too many touch point to recover
Investments…..

• Company • RTA • SEBI

• C.S • MCA • NCLT

• PF office • Banks • Legal Advisor

• PF trust • RBI • Courts

• Broking Firm
• Insurance Co. • Post office
• Financial
• IRDA • CA
Advisor
What we do ?
We assist in Recovery of Lost / Forgotten or scattered
Investment in…..

• Unclaimed • Matured • Unclaimed

Provident Fund Insurance Mutual Fund

• Old Shares • Bank Deposits • Postal Savings

• Assisting to
• Debtor
recover any • Fixed Deposit
Recovery
Investment
 Why Investor Need to worry

 Unclaimed Dividend as well as Shares on which dividend remained

unclaimed for more than 7 years gets transfer to IEPF (Investor
Education & Protection Fund) after 7 years u/s 125 of Companies Act,
2013
 Unclaimed corporate deposit along with interest transfer to IEPF after 7
year
 Share application money due for refund gets transfer to IEPF
 Matured deposits or debentures also gets transferred to IEPF
 If an account is inoperative for more than 10 years, the amount has to
be transferred to Depositors Education and Awareness Fund (DEAF)
operated by the RBI
Shares & Securities
Instrument Shares & Securities (Dividend / Interest)

Regulator SEBI (Securities & Exchange Board of India)

Relevant provision Section 124/125 of Companies Act, 2013

When it is considered to be Unclaimed ?
To whom it gets transferred ?
After how may years its gets transferred to
Authority ?
What happens after it transferred to
Authority ?
Whether it can be claimed back by
investor ?
Formalities to claim back
When dividend is not encashed within 30
days of declaration
Investor Education & Protection Fund
7 years from the date amount becomes
unclaimed
Refunded to investor, investor awareness
etc
Yes
File form IEPF 5 online and submit it with
Indemnity, Adhar Card, Advance Reciept,
Letter of Entitlement etc to Nodal Officer
of concerned company

Appellate Authority SEBI

Shares & Securities
ISSUE OF DUPLICATE SHARES

 If original share certificates are lost, apply for duplicate shares

 KYC documents
 Indemnity
 Affidavit
 Surety ( KYC and Income Proof)
 Advertisement in Newspaper (If value of shares more than Rs.
10,000/-)
 Copy of Dividend warrant / Any communication from Company
Shares & Securities
TRANSFER OF SHARES
•Transfer of physical shares from Transferor to Transferee
•Form SH-4 dully filled, signed and executed
•Pan Card of Transferor mandatory as per Regulation 40(7) and 61(4) of
SEBI (Listing Obligation & Disclosure Requirements) Regulation, 2015.
However SEBI circular dated 06th November, 2018 has given
exemptions if shares are purchased before 01 st December, 2015.
•KYC documents of Transferee
•Signature verification of Transferor from bank as per format given by
RTA (Registrar & Transfer Agent)
•Stamp Duty to be paid @ 0.25% of market value of shares
•However as per Regulation 40 of SEBI (LODR)(Amendment)
Regulation, 2018, Transfer of Physical shares will not be allowed after
31st March, 2019 (Earlier deadline was 05th December, 2018)
Shares & Securities
TRANSMISSION OF SHARES

•Transmission of share happens when legal heir claims the shares from
deceased shareholder
•KYC documents of Legal heir
•Indemnity, Affidavit etc
•If value of shares is more than Rs. 2 Lakhs (in case of physical shares) and
Rs. 5 Lakhs(in case of demat shares) – Probate of Will or Succession
Certificate is required from Court
•If value of shares is less than Rs. 2 lakhs – Surviving Member’s Certificate
is required from SDM (Sub-Divisional Magistrate) / DM (Divisional
Magistrate) office.
Shares & Securities
Transfer of shares to IEPF(Investor
Education & Protection Fund)
• As per IEPF Authority(Accounting, Audit, Transfer and Refund) Rules,
2016; if dividends are unclaimed for continuous 7 years from the due
date of declaration of dividend, dividends are transferred to IEPF
•As per Section 125 of the Companies Act, 2013 read with IEPF Rules,
2016, if dividend remained unclaimed for continuous 7 years, shares
pertaining to those dividend are also transferred to IEPF.
•To claim the shares / dividends from IEPF, Investors need to file Form
IEPF 5 and submit requisite documents to the Nodal Office of the
company.
•Nodal Officer of the company need to issue Verification Report to IEPF,
on the basis of which, IEPF Authority approves / rejects the claim
Shares & Securities
Recent Amendments & Developments
•UNLISTED PUBLIC COMPANIES:-
As per newly inserted Rule 9(A) of Companies (Prospectus and Allotment of
Securities) Third Amendment Rules, 2018, dematerialization of shares of
Unlisted Public Companies has been made mandatory w.e.f. October 02nd,
2018.
Every Unlisted Public Company shall ensure that before issue / buyback of any
security or issue of bonus or right shares, entire holding of securities of its
promoters, directors, KMP has been dematerialized
Even Unlisted companies are required to make fresh issue or allotment in
dematerialized form only
• Listed Companies:-
 No transfer of Physical shares of Listed Companies shall happen after 31st
March, 2019 as per SEBI(LODR)(Amendment) Regulations, 2018
 Transfer of shares of Listed Companies can take place without PAN card in
case of NRIs being Transferors (Sellers)
contd….
Shares & Securities
Recent Amendments & Developments
•SEBI Circular dated 06th November, 2018 for Transfer of Shares:-
 Shares can be transferred even if Transfer Deeds are executed prior to
notification of LODR (01st December, 2015), without PAN of Transferor
 Shares can be transferred even in case of Mismatch of Name of transferor on
PAN and Share Certificate
 Shares can be transferred even in case of Non availability / Mismatch of
Signatures of Transferor
 RTAs shall try to connect with transferor bases on his last known address and
dividend history
 In case Transferor is not approachable or is not co-operating, RTAs need to
make a public announcement in this regard with a waiting period of 30 days
If there is no objection even after 30 days of public advertisement, Shares can
be transferred by RTAs by asking for Indemnity Bond and Address proof of
Transferee and also an Undertaking that Transferee shall not sell / demat shares
within 6 months of transfer of shares in his favor.
Unlisted Public Co Share in DEAMAT only

• MCA NOTIFICATION DATED 10 SEPT 2018

• Every unlisted public company shall –

• (a) issue the securities only in dematerialised form; and
• (b) facilitate dematerialisation of all its existing securities in
accordance with provisions of the Depositories Act, 1996
and regulations made there under.
Physical Shares transfer last date 31.3.19

• Transfer of securities only in demat form- Deadline

extended till April 1, 2019 - Dec 03, 2018- SEBI- PR
No.: 51/2018
•
• The Board, on March 28, 2018, decided that except in case of transmission or
transposition of securities, requests for effecting transfer of securities shall not
be processed unless the securities are held in the dematerialized form with a
depository. This measure was to come into effect from December 5, 2018.
•
• Subsequently, SEBI has received representations from shareholders for
extension of the date of compliance. In view of the same, the deadline has
been extended and the aforesaid requirement of transfer of securities only in
demat form shall now come into force from April 1, 2019.
NO PAN FOR NRI-Feb 2019

• Markets regulator Sebi Monday granted relaxation to non-residents such as NRI, PIOs, and foreign nationals from
furnishing a copy of PAN card and allowed them to transfer equity shares held by them to their immediate relatives.

However, the relaxations are subject to certain conditions, Sebi said in a circular.

Under Sebi's LODR (Listing Obligation and Disclosure Requirements) provisions, transferee as well as transferor is
required to furnish a copy of their PAN (Per ..

•
• Many of the non-residents like Overseas Citizens of India (OCIs), Non Resident Indians (NRIs), Persons of Indian
Origin (PIOs) and foreign nationals were facing difficulties in transferring the shares, as many of them do not posses
the required PAN card.

To address such difficulties, it has been decided to grant relaxation to the non-residents from furnishing PAN card
details and allowing them to transfer equity shares held by them in the listed entities to their immediate relatives, Sebi
said.

However, the relaxation will only be available for transfers executed after January 1st, 2016 and, only for non-
commercial transactions i.e transfer by way of gift among immediate relatives.

•
Shares & Securities
ASTONISHING FACTS

RS 10000 of Wipro Rs 10,000 of CIPLA Rs 10,000 of Infosys

Today’s worth is Today’s worth is Today’s worth is

more than 750 cr more than 100 cr more than Rs 150 cr

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Debtor Recovery
Some Facts
 Recovery from Debtor is done through Insolvency & Bankruptcy
Code, 2016
 It is a time bound resolution for recovery of Bad Debt (within 6-9
months)
 Recovery can be made for Debts arising for last 3 years
 IBC (Insolvency & Bankruptcy Code) empowers all classes of creditors
(secured and unsecured lenders, employees, trade creditors, regulatory
authorities)
 Provides for immediate suspension of the BOD and promoters’
powers.
Debtor Recovery
Insolvency Resolution
The process may be initiated by either the debtor or the creditors.
National Company Law Tribunal (NCLT) would deal with matters
relating to corporate insolvency

Who are Financial and Operational creditors ?

Financial debt: means debt extended against consideration for the time
value of money, and includes the following example:
Term Loans, Working capital loans etc.,
Receivables etc;

Operational debt: means debt incurred in exchange for the provision of

goods or services (including employment) or debt in respect of the
payment of statutory dues;
• Creditors include secured, unsecured creditors including foreign
creditors and decree holders from the court
Wealth Protection
We are earning for whom??

o Most of us work hard to create financial assets.

o We spend a lot of time planning our finances, pondering over

that expensive house we plan to buy and creating wealth
through stocks and gold.

o For all of us, the sole motive of such measures is leave a

rich financial legacy for children / family.

o Therefore, it's important that the wealth is transferred in the

right hands in case of any contingencies
Some example of Unclaimed Investment

 Unclaimed Provident Fund

 Unclaimed Matured Insurance
 Inoperative Bank Accounts
 Physical Shares
 Pending Transfer of shares
 Pending Transmission of shares
 Unclaimed Dividends
 Unclaimed Bonuses, Split Shares
 Corporate Deposit
Reason of Unclaimed Investment

Share Samadhan

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Life is Uncertain

Old Age
Natural
Ailments Disability
calamities

Untoward Job/Income
Variety of
Incidents Changes
Investments
Should not compromise…

 Buy Term Policy from Life Insurance Companies.

Suggestive to take term policy equivalent to approx 12 time of

the income of the earning member.

Road accident death compensation from MACT (Motor

Accident & Claim Tribunal)

Never delay in the renewal of General Insurance

Some lesser known facts

 In case of sudden demise, the person whose PF was getting deducted

then there is EDLI (Employee Deposit and Linked Insurance) insurance
is also there upto Rs. 600,000/- claims can be made.

 A wrong perception : PF can not be claimed in case employer shut

down the operation .

 Now accidental cover though booking of tickets through IRCTC is up to

Rs 10 Lakhs
Just imagine these Situation

30,000 death in Gujrat 400 daily death in Road Around 100 daily rail accident
Earthquake in fraction Accident In India Death in India in 2014
Of seconds 3000 in world

One Sudden Cardiac Documents may be

Theft / Document Floods
Arrest in every 33 gutted in fire misplace
Second
Is Your Family member
aware about your
Investments?
What to do then…..

Family Need to
Know Nominee

Preserving the
information is
structured
manner
Else Rest this with digital wallet companies

How about someone there

who is like a Trusteeship of
your Investment
Preventive measures

•Keep photocopy of all the investments at Home.

•Password saving

•Family should be aware

How safe is subscriber Info

Up to 256 SSL
We do not ask Secured and
any document encrypted

No info sharing Family verification

till subscriber will be done before
alive sharing

It is just as Gmail
of your
Investment
 Media Coverage
Zee Business_25.03.2016 Economic Times _09.03.2016 Purvodaya_08.03.2016

Focus News_04.09.2015 Economic Times Wealth _13.03.2016

Pratidin_30.06.2015
Share Samadhan – Journey started in 2011
Abhay Chandalia
Abhay is a Chartered Accountant,
Company Secretary and LLB who
co-founded the Whiteinc group
after long 15 years of corporate
association with prominent groups
like K K Birla, L N Mittal.
20 employee team
12 CA/CS/MBA
Vikash Jain
Vikash is a qualified Chartered
Accountant and Company
Secretary co-founded Whiteinc
group after his illustrious service in
CEAT Tyres (RPG group), KPO-
major Evalueserve and Carnation,
owned by former MD of Maruti,
Jagdish Khattar.
8 Graduates /support staff
We would be glad to hear
from you….

CA Abhay Chandalia
FCA, FCS, LLB, MCOM, MBA
M- 9310116111
Abhay.chandalia@sharesamadhan.com

Regd office
B 35, Lower Ground Floor,
South Ex Part II, New Delhi- 110049 (India)
M: +91 8800332200| P: +91 11 4908 4001 (60 lines)
ww.sharesamadhan.com
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