DEPOSITORIES & CUSTODIAN CELL

The process of dematerialisation has paved the way for eliminating physical paper and related problems from the Indian Capital Market in a smooth and efficient manner. 

Under the Depositories Act, 1996 and the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 the issuer company is under an obligation to complete the process of dematerialisation once it is admitted into the depository system and is in receipt of the certificate of security from the investor. 

However, it has been reported by Central Depository Services (India) Ltd and National Securities Depository Ltd that some of the companies are deliberately delaying dematerialisation of securities thereby hampering the process of dematerialisation. 

Delay in dematerialisation by issuer companies is in contravention of the provisions of the Depositories Act, 1996 and the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996. Delay in dematerialisation adversely affects the investors confidence and is detrimental to the interest of the investors / shareholders in as much as the shareholders cannot sell their shares and deprives them of liquidity and results in loss of opportunity to sell. 

SEBI has, therefore issued directions under section 19 of the Depositories Act, 1996 against the following 38 companies, unduly delaying dematerialisation of shares, to complete the pending dematerialisation requests within 15 days failing which further appropriate action shall be initiated against the issuer company and its Directors.

LIST OF ISSUER COMPANIES AGAINST WHOM NOTICE U/s 19 OF THE DEPOSITORIES ACT, 1996 HAS BEEN ISSUED FOR UNDULY DELAYING DEMATERIALISATION OF SHARES