SEBI Proposes Mandatory Demat Securities Post-Corporate Actions

The Securities and Exchange Board of India (SEBI) has proposed requiring listed companies to issue securities only in demat form after stock splits, mergers, demergers, or face value consolidations. This aims to increase transparency, reduce fraud, and enhance safety for investors.

Currently, while physical securities are legally permissible, they must be converted to a demat form for trading or transfer.

SEBI's proposal includes opening a separate demat or escrow account for investors without demat accounts.

The changes will also modify SEBI Listing Obligations and Disclosure Requirements (LODR) norms to align with the dematerialization goal.