Demat a/cs May Be a Must for Select Shareholders Before IPO

The Securities and Exchange Board of India (Sebi) on Wednesday proposed mandating select shareholders, including directors, key managerial personnel and current employees, to hold shares in the demat form before filing an initial public offering (IPO) document.

- FE BUREAU

The proposal has been made to fill the regulatory gap that allows a significant volume of physical shares to continue existing after listing. The regulator has sought public comments on the proposal till May 20.

These measures, if implemented, will help eliminate inefficiencies and risks associated with physical share certificates, including loss, theft, forgery, and delays in transfer and settlement.