The Securities and Exchange Board of India (SEBI) has exempted promoters from the 100-per cent demat requirement it they have sold their shares in physical mode without lodging them for transfer with the company.
This would also apply in cases where part or entire shareholding of promoters/promoter group are sub judice before any court/tribunal or where shares cannot be converted into demat form due to death of any promoter, SEBI said.
The exemption will also apply to cases where shares allotted to promoters are awaiting final approval for listing from stock exchange and such pendency is less than 30 days or shares that upon receipt of final listing approval from stock exchange are pending conversion to demat and such pendency is less than 15 days, the regulators said in a circular issued today.
SEBI had, through circulars issued on 17 June 2011 and 30 September 2011, issued guidelines to promoters and promoter groups regarding 100 per cent shareholding in demat form.
SEBI said it has since reviewed the compliance and has come to the conclusion that promoters by and large have complied with the demat requirements.
SEBI said it has also received representations from various companies bringing out issues relating to dematerialisation of holdings of promoters and have accordingly sought exemption from compliance in exceptional cases.