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Threshold limit mooted for transimission of shares

MUMBAI: The Securities and Exchange Board of India (SEBI) Committee on ‘Transmission of Shares’, on Tuesday recommended a threshold limit at holding of 200 shares or Rs. 1 lakh in value, whichever is higher, for companies to require an affidavit, deed of indemnity and no objection certificate from other legal heirs.

A standard format of these documents has also been recommended.

(Transmission means devolution to title to shares otherwise than by transfer, for example, devolution by death, succession, inheritance, bankruptcy and marriage.)

“The prescribed threshold limit shall be the basic minimum limit to be adhered to by all listed companies. The companies having higher threshold shall continue to do so, and also can set liberal threshold,” the report of the committee stated.

The committee also recommended that companies, depositories, recognised investors’ associations and SEBI shall embark on a special drive to urge shareholders to utilise the nomination facility. “Depository beneficial owner accounts opened on or after October 1, 2007, shall mandate nomination at the account opening stage itself.”

SEBI had constituted a group to suggest suitable measures to address issues relating to difficulties faced by the investors while dealing with transmissions of securities in the physical and dematerialised mode. The terms of the reference of the group were to: examine various procedures followed by the listed companies and registrar and share transfer agents for transmission of physical shares; explore the implementation of the concept of either or survivor in depository system; and to suggest uniform norms and procedures relating to the transmission of physical shares, specifically with reference to documentation required for transmission.

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