The Securities and Exchange Board of India (SEBI) on March 20, 2024, issued the notification regarding Safeguards to address the concerns of the investors on transfer of securities in dematerialized mode.
The following has been stated namely: -
• Reference is drawn to the SEBI Master circular for Depositories dated October 06, 2023.
• Para 1.12 has been amended to state “Safeguards to address the concerns of the investors on transfer of securities in dematerialized mode”
o The explanation for the amendment is as follows: -
“1. An inactive/dormant account refers to an account where no transaction has taken place for a continuous period of 12 months.
2. Further, a credit in the demat account through the purchase of securities and voluntary corporate action (such as subscribing to rights issues/systematic investment plans (SIPs) of mutual funds, etc.) may be considered as a transaction for assessing the dormancy. However, any credit due to involuntary corporate action (such as bonus, split, etc.) may not be considered a transaction for assessing the dormancy”
The provisions will come into force on April 01, 2024.
[Notification No. SEBI/HO/MRD/MRD-PoD-2/P/CIR/2024/18]
