Sebi mulls demat mandate for new shares post splits

Mumbai: The Securities and Exchange Board of India (Sebi) has proposed to mandate the issuance of new securities in case of a split of the face value of shares only in demat form.

Rules currently allow listed companies to issue securities in the physical mode in case of consolidation of the face value of securities, demerger or split of the face value of securities.

At present, few investors hold securities in physical form. Although it is legally permissible to hold securities in physical form, an investor can sell or transfer such securities only after dematerialising them.


"In order to progress further towards greater dematerialisation of securities and to prevent fresh creation of physical securities by listed entities, a need is felt that the existing security certificates are converted into demat form and no new physical security certificates are created," Sebi said in a discussion paper on Tuesday.