Compulsory demat – for unlisted public companies

MCA has vide its notification dated 10th September, 2018 mandated that with effect from 2nd October, 2018
1) every unlisted public company shall issue its shares only in dematerialised form;
2) facilitate dematerialisation of all its existing securities;
3) shall make necessary application to the depository in this regard;
4) shall secure International Security Identification Number (ISIN) for each type of security and inform its security holders accordingly;
5) shall make timely payment of fees to the Depository and Registrar & Share Transfer Agent (RTA) in accordance with tripartite agreement into between them;
6) shall maintain security deposit of not less than two years’ with the Depository & RTA in such form as may be agreed between the parties;
7) shall comply with the regulations or guidelines or circulars or instructions, if any, issued by SEBI w.r.t dematerialisation of securities of unlisted public companies;
8) shall submit a half yearly audit report u/r 55 of SEBI (Depositories & Participants) Regulations, 2014 to the ROC.
Every shareholder of an unlisted public limited company, shall with effect from 2nd October, 2018 shall
1) get his/her/ its securities dematerialsed before transfer
2) who subscribes to any securities after the aforesaid date, shall ensure that his securities are dematerialised.
The grievances of a security holder of an unlisted public company shall be filed before the Investor Education & Protection Fund. The IEPF Authority is empowered to initiate action against any unlisted public company, depository, RTA.

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