Session with Mr. Nitin Ambure ; Demat of Unlisted Companies & its Shares & e-voting of Stakeholders

 NEWS BENGAL TODAY, Kolkata ; MCCI organised a Session with Mr. Nitin Ambure, Vice President (Operations), Central Depository Services Ltd. (CDSL) on ‘Demat of Unlisted Companies & its Shares & e-voting of Stakeholders’ at the Conference Hall of the Chamber last week..

Mr. Nitin Ambure, Vice President (Operations), CDSL said that transfer of listed companies shares is allowed only through demat mode except in case of transmission or transposition of securities mandated by SEBI vide its notification number SEBI/LAD-NRO/GN/2018/24 dated June 08, 2018 on Listing Obligations and Disclosure Requirements (LODR) Regulations.
Pursuant to the above notification, Issuers/RTAs had made representations to CDSL requesting for increase in timelines for processing of Dematerialization Request Numbers [DRNs] due to the unusual surge in volume.
CDSL had taken up the matter with SEBI to increase the timeline for processing of DRNs from current 15 days to 30 days. SEBI had granted relaxation in timelines for processing of DRNs to 30 days till 30 June 2019 from current 15 days.

Vide SEBI Circular CIR/MRD/DP/10/2015 dated June 05, 2015, lssuers/RTAs were directed to update Distinctive Number (DN) information in respect of all physical share capital and overall DN range for dematerialized share capital for all listed companies and directed to take steps and update the DN database latest by December 31, 2015.

The Notification from Ministry of Corporate Affairs (MCA) issued on Unlisted Public companies dated 10th September, 2018 states that every unlisted public company shall facilitate dematerialisation of all its existing securities by:

making necessary application to a depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996,

securing International Security Identification Number (ISIN) for each type of security, and

informing all its existing security holders about such facility.


Unlisted public companies have to pay Annual Custodial Charges payable by an Issuer to CDSL. Unlisted public companies must maintain security deposit of not less than two years annual custodial fees.

          e-Voting is an Internet based facility and it enables investors to cast their votes anytime and anywhere. It is an automated system which records votes and it gives results instantaneously. Also, it is a cost & time efficient model as compared to physical postal ballot. The results of Voting are available immediately at the end of the voting period.

          Over 5,100 companies have tied up for CDSL’s e-Voting facility and it has successfully facilitated over 17,000 e-Voting instances.

          As per MCA circular dated 27th March, 2014, every listed company or a company having not less than one thousand shareholders shall provide to its members facility to exercise their right to vote by electronic means.

Earlier, Mr. Sanjay Rasiwasia, Chairman, Standing Committee on Banking & Finance, MCCI in his welcome address said that in order to bring about greater transparency in corporate structure and in view of advantages of dematerialisation of securities, especially in terms of KYC and investor protection, the Government’s focus on ‘Digital India’ and the enabling provisions available under section 29(1)(b) of the CA-13, the Ministry has amended the relevant rules to apply the dematerialisation requirements to unlisted public companies, in addition to listed companies. Consultations were held in this regard with all stakeholders and rules were amended on 10th September, 2018 to mandate, w.e.f. 2nd October, 2018, issue and transfer of securities by unlisted public companies in demat form only. As on December 20, 2017, there were 11.34 lakh unlisted companies, out of which more than 66,000 were unlisted public companies. The new norms are aimed at these 66,000 plus companies.
 Every unlisted company making any offer for issue of any securities or buyback of securities or issue of bonus shares or rights offer is required to comply with certain requirements, as per the rules. While unlisted public companies are expected to facilitate the dematerialisation of their securities in coordination with depositories and share transfer agents, grievances of any security holder of unlisted public companies would be handled by the Investor Education and Protection Fund (IEPF) Authority.

CDSL has ventured into the arena of providing e-Voting services in an effort to reduce the time taken for conducting a postal ballot and also obviate the issues faced by investors in voting for corporate resolutions. The e-Voting System for Corporates is a web based platform which enables companies to obtain votes for resolutions proposed by it from its security holders electronically in a quick and cost efficient manner. The e-Voting System for Corporates was launched by Mr. Salman Khurshid, the then Hon’ble Minister of Corporate Affairs, on 17th November 2009, and the initiative has been credited as a step forward in ensuring good corporate governance and investor empowerment. The e-Voting System has been approved by the Ministry of Corporate Affairs (MCA) vide its circular no. 21/2011 dated 2nd May, 2011. The Standardization Testing and Quality Certification (STQC) has also been taken for the e-Voting website. Additionally, the e-Voting system is ISO 9001:2015 certified.