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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Safeguards to address the concerns of the investors on transfer of securities in dematerialized mode

20-Mar-2024 | SEBI/HO/MRD/MRD-PoD-2/P/CIR/2024/18

SEBI has issued amendment to Para 1.12 of SEBI Master circular effective from 1st April, 2024 for Depositories dated October 06, 2023 To harmonize the classification of inactive/dormant accounts across Stock Exchanges & Depositories and to strengthen the measures to prevent fraud / misappropriation for inoperative demat accounts, based on consultation with depositories and the recommendations of SMAC.

By virtue of this notification olflowing safeguards shall be put in place to address the concerns of the investors arising out of transfer of securities from the BO Accounts:

1.The depositories shall give more emphasis on investor education particularly with regard to careful preservation of Delivery Instruction Slip (DIS) by the BOs. The Depositories may advise the BOs not to leave blank or signed DIS with the Depository Participants (DPs) or any other person/entity.
2.The DPs shall not accept pre-signed DIS with blank columns from the BO(s).
3. If the DIS booklet is lost / stolen / not traceable by the BO, the same must be intimated to the DP immediately by the BO in writing. On receipt of such intimation, the DP shall cancel the unused DIS of the said booklet.
4. The DP shall also ensure that a new DIS booklet is issued only on the strength of the DIS instruction request slip (contained in the previous booklet) duly complete in all respects, unless the request for fresh booklet is due to loss, etc.. Further, in case the request for issuance of the DIS booklet is received in an inactive/dormant account, the DIS booklet shall be delivered at the registered address of the BO as per the DP records. This shall help
ensure the genuineness of the BO?s request for issuance of DIS. Such issuance of DIS shall be authorized by the Compliance Officer or any other designated senior official of the DP.

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