Key Takeaways: - Transfer / transmission of securities - Shares with superior voting rights - Book closure / Record date - Dividend and dividend distribution policy

1. CS Meenakshi Jayaraman
SEBI (LODR) Regulations, 2015
Obligations on listing of specified
securities- Part VI

2. 2
Credits and Acknowledgments
Iswariya BS

3. 3
Legends used in the Presentation
AOA Articles of Association LE Listed Entity
BOD Board of Directors MOA Memorandum of Association
CA Companies Act PCS Practising Company Secretary
CIRP Corporate Insolvency Resolution
Process
Reg. Regulation
FY Financial Year RPT Related Party Transaction
GM General Meeting SCRA Securities Contract Regulation Act
IBC Insolvency and Bankruptcy Code SE Stock Exchange
ICDR Issue of Capital and Disclosure
Requirements
SEBI Securities and Exchange Board of
India
ID Independent Director Sec. Section
IPO Initial Public Offer SR Superior Voting Rights

4. 4
Presentation Schema
Transfer/
transmission/
transposition of
securities with
relevant Schedule
Case law: Era Infra
Engineering Limited
Other provisions
relating to
securities
Other provisions
relating to
outstanding SR
equity shares
Record date or date
of closure of
transfer books
Dividend and
dividend
distribution policy
Dividend
distribution policy
of Infosys

5. Regulation 40- Transfer/ transmission/ transposition
of securities
5
The LE shall comply with this reg. for effecting transfer of securities
Condition for transfer: Securities shall be in held dematerialised form with the depository*
*Inserted w.e.f. 08/06/2018
The BOD may
delegate the
power of
transfer of
securities to
-A committee
-Compliance
officer
-Registrar to an
issue and/ or
share transfer
agent
The BOD/
delegated
authority shall
attend to the
formalities
relating to
transfer at least
once in a
fortnight
The delegated
authority shall
report the
details on
transfer in each
BOD meeting

6. Contd.
6
The LE on receipt of proper documents
for transfer:
If it accepts the transfer:
Register such transfer in the name of
transferee and issue certificates/
receipts/ advices as applicable for
transfers
If it rejects the transfer:
Issue any valid objection or
intimation to the transferee or
transferor
Duration:
Within a period of 15 days of receipt
• If the LE failed to comply as said above within the specified period it shall
compensate the aggrieved party for the opportunity losses caused during
the period of the delay
• Any claim, difference/ dispute under this shall be referred to and decided
by arbitration as provided in the bye-laws and/ or regulations of the SE(s).
• During the intervening period on account of delay in transfer above, the
LE shall provide all benefits, which have accrued, to the securityholder in
terms of provisions of sec 126 of CA, 2013- Right to dividend, rights
shares and bonus and sec 27 of the SCRA, 1956- Title to dividend

7. Contd.
7
In case of transmission, the process shall be completed within the period specified below:
For securities in demat form- within 7 days from the date of receipt of specified documents
For securities in physical form- within 21 days from the date of receipt of specified documents
LE shall maintain proper verifiable dated records for all correspondence with the investor
Transfer shall not take place, if there is any statutory prohibition/ any attachment/ prohibitory
order of a competent authority restrains from transfer the securities from the name of the
transferor(s).
The LE shall not register the transfer of its securities in the name of the transferee(s) when
the transferor(s) objects to transfer. In that case the transferor shall serve to the LE a
prohibitory order of a Court of competent jurisdiction within 60 working days of raising the
objection

8. Contd.
8
Not a criteria for rejecting the transfer: If the transferor(s) either alone or jointly with any
other person or persons are indebted to the LE on any account whatsoever
Half-yearly compliance:
A certificate from a PCS shall be produced by the share transfer agent and/or the in-house
share transfer facility within 1 month of the end of each half of the FY, certifying that all
certificates have been issued within 30 days of the date of lodging for transfer,
subdivision, consolidation, renewal, exchange or endorsement of calls/allotment monies
and the same shall be filed with the SE(s) simultaneously.
• transmission of securities to the legal heir(s), where deceased holder of
securities was the sole holder of securities
• transposition of securities, when there is a change in the order of names
in which physical securities are held jointly in the names of two or more
holders of securities.
Additional application of this reg.-
• deletion of name of the deceased holder(s) of securities, where the
securities are held in the name of two or more holders of securities

9. Case Law: Era Infra Engineering Limited
9
Violated the following reg.- from March 2016 to June 2018
Reg. 7 (3)- The LE shall submit a compliance certificate to the exchange, duly signed by
both the compliance officer of the LE and the authorized representative of the share
transfer agent, wherever applicable, within 1 month of end of each half of the financial
year, certifying compliance about the activities of share transfer
Reg. 13 (3)- The LE shall file with the recognized SE(s) on a quarterly basis, within 21 days
from the end of each quarter, a statement giving the number of investor complaints
pending at the beginning of the quarter, those received during the quarter, disposed of
during the quarter and those remaining unresolved at the end of the quarter
Reg. 40 (9) & (10)- Certificate from PCS has to be submitted by share transfer agent or in
house share transfer facility

10. Contd.
10
Issue of show cause
notice on 18th October,
2019
Reply on 30th
December, 2019
Personal hearing on 18th
March, 2020
An authorised
representative on behalf
of the noticee appeared
for the hearing
By the resolution
professional stating that
the Company is under
CIRP as per NCLT order
dated 8th May, 2018
As to why an inquiry
should not be done and
penalty should not be
imposed
The competent authority appointed an Adjudicating officer to inquire into and
adjudicate under sec 15A (b) of the SEBI Act, 1992
Both BSE and NSE in which securities
of the company were listed informed
SEBI about the non-compliance on
its request
Subsequently both the SEs delisted
the securities of the Company

11. Contd.
11
Final Order : Penalty of 6 lakh was imposed for violating the provisions of the SEBI (LODR),
Regulations, 2015
Adjudicating officer stated that –
• Noticee violated the provisions of LODR Regulations by:
a. Not making disclosures and
b. Not making disclosures within the prescribed time
•Noticee violated the provisions of Section 15A(b) of SEBI Act by:
a. Not filing return or information within the prescribed time and
b. Shall be liable for penalty of one lakh rupees for each day during which
default continues or one crore rupees, whichever is less
Final order was passed by the adjudicating officer on 24th April, 2020

12. Contd.
12
Procedural requirements as specified in Schedule VII has to be followed for transfer of securities
Schedule VII
A. Requirement of PAN
For registration of transfer of securities, the transferee(s) as well as transferor(s) shall furnish a
copy of their PAN card to the LE for registration of transfer of securities
Where PAN card is not available i.e. in case of residents of Sikkim, the requirement of PAN Card
may be substituted with Identity proof.
In case of mismatch in PAN card details as well as difference in maiden name and current
name, in case of married women, of the holder(s) of securities, the LE may collect the PAN card
as submitted by the transferee(s) or transferor(s) as the case maybe
Subject to the LE verifying the accuracy of the claim of such transferee(s) or transferor(s) by
collecting sufficient documentary evidence in support of the identity of the transferee(s) or
transferor(s)

13. Contd.
13
B. Differences in signature
If there is minor difference in the signature of the transferor(s), the LE shall follow the
following procedure for registering transfer of securities-
The LE shall maintain proof of delivery for their record(s).
The LE shall promptly send to the first transferor(s), via speed post an intimation of
the aforesaid defect in the documents and inform the transferor(s) that objection,
supported by valid proof, is not lodged by the transferor(s) with the LE within 15
days of receipt of the this letter, then the securities shall be transferred
If the intimation to the transferor(s) is delivered and the objection from the
transferor(s) with supporting documents is not received within 15 days, the LE
shall transfer the securities, provided the LE does not suspect fraud or forgery in
the matter

14. Contd.
14
If there is major difference in the signature of the transferor(s), the LE shall follow the
following procedure for registering transfer of securities-
The LE shall promptly send to the transferee(s), via Speed Post, an Objection Memo along
with the documents in original marking the reason as “material signature difference/ non-
availability of signature” and an advice to ensure submission of requested documents of the
transferor(s)
The LE shall also send a copy of Objection memo to the transferor(s) simultaneously
Requirement of additional documents of transferor(s)
• An Affidavit to update transferor(s) signature in its records
• An original unsigned cancelled cheque and banker’s attestation of the transferor(s)
signature and address and
• Contact details of the transferor(s)

15. Contd.
15
If the intimation to both the transferor(s) and the transferee(s) are delivered, requested
documents of the transferor(s) are submitted to the LE and the address attested by the
bank tallies with the address available in the database of LE, it shall transfer the securities,
provided the LE does not suspect fraud or forgery in the matter
The LE shall maintain proof of delivery for their record(s).

16. Contd.
16
C. Additional documentation requirements in case of transmission of securities
Demat form
Physical form
Where the securities are held in a single name without a nominee, for the
purpose of following simplified documentation, as prescribed by the depositories
in byelaws or operating instructions, as applicable, the threshold limit is Rs. 5
lakh per beneficiary owner account.
Where the securities are held in a single name with a nominee
i. Duly signed transmission request form by the nominee
ii. Original or copy of death certificate duly attested by a notary public or by
a gazetted officer
iii. Self attested copy of PAN card of the nominee

17. Contd.
17
Where the securities are held in a single name without a nominee
• An affidavit from all legal heir(s) made on appropriate non judicial stamp
paper, to the effect of identification and claim of legal ownership to
the securities shall be required
• If the legal heir(s)/claimant(s) is named in the succession certificate/
probate of will/ will/ letter of administration, an affidavit from such legal
heir(s)/ claimant(s) alone would be sufficient.
For value of securities up to Rs. 2 lakh per LE, as on date of application, a
succession certificate/ probate of will/ will/ letter of administration/ court
decree, as may be applicable in terms of Indian Succession Act, 1925 may be
submitted
• In there absence following may be submitted-
• No objection certificate from all legal heir(s) who do not object to such
transmission/ copy of family settlement deed duly notarized and executed
by all the legal heirs of the deceased holder and
• An indemnity bond made on appropriate non judicial stamp paper,
indemnifying the Share Transfer Agent/ LE

18. Contd.
18
•For value of securities, > Rs. 2 lakh per LE, as on date of
application, a succession certificate/ probate of will/ will/ letter
of administration/ court decree, as may be applicable in terms
of Indian Succession Act, 1925 shall be submitted
•The LE may however, at its discretion, may increase the value
of securities threshold limit of Rs. 2 lakh

19. Regulation 41- Other provisions relating to securities
1919
•LE shall not exercise lien on -
•Fully paid up shares
•Partly paid up shares- except to the extent of amount called/ payable at a fixed time in respect
of such shares
•For any call money paid in advance, the security holder shall -
•avail interest for the money paid in advance
•not avail any right to dividend or to participate in profit
•The LE shall not issue shares in any manner that may confer any person superior / inferior rights
as to dividend on equity shares that are already listed or inferior voting rights on equity shares
that are already listed
•A LE having SR equity shares issued to its promoters/ founders may issue SR equity shares to its
SR shareholders only through a bonus, split or rights issue in accordance with the provisions of
the SEBI (ICDR) Regulations, 2018 and the CA, 2013

20. Contd.
20
• The LE shall issue/ offer in the first instance all shares (including forfeited shares),
securities, rights, privileges and benefits to subscribe on pro rata basis, to the
equity shareholders of the LE, unless the shareholders in the GM decide otherwise
•The LE shall not select any of its listed securities for redemption other than on pro-
rata basis or by lot, unless it is provided in the terms of issue

21. Regulation 41A- Other provisions relating
to outstanding SR equity shares*
*Inserted w.e.f. 29/07/2019
The SR equity shares shall be treated at par with
the ordinary equity shares in every respect,
including dividends, except in the case of voting
on resolutions
The total voting rights of SR shareholders
(including ordinary shares) in the issuer
upon listing, pursuant to an IPO shall not
at any point of time exceed 74%

22. Contd.
22
The SR equity shares shall be treated as ordinary equity shares in
terms of voting rights (i.e. one SR share shall only have one vote)
in the following circumstances -
Appointment/ removal of ID and/or
auditor
Where a promoter is willingly
transferring control to another entity
RPT in terms of these regulations
involving an SR shareholder
Voluntary winding up of a LE
Changes to AOA/ MOA of the LE, except
any change affecting the SR equity share
Intimation of a voluntary resolution
process under IBC
Utilization of funds other than business
purpose
Substantial value transaction based on
materiality threshold as specified under
these reg.
Passing of special resolution in respect
of delisting/ buy-back of shares and
Any other circumstances/ subject
matter as may be specified by the
Board, from time to time

23. Contd.
23
The SR equity shares shall
be converted into equity
shares having voting rights
same as that of ordinary
shares on the 5th
anniversary of listing of
ordinary shares of the LE
SR shares may be valid
for up to an additional
5 years, after a
resolution to that effect
has been passed, where
SR shareholders are not
permitted to vote
Option to convert:
The SR shareholders
may convert their SR
equity shares into
ordinary equity shares
at any time prior to
the period as specified
herein

24. Contd.
24
Compulsory
conversion of SR
equity shares having
voting rights same as
that of ordinary
shares on the
occurrence of these
events
Demise of the
promoter(s) or founder
holding such shares
When an SR
shareholder resigns
from the executive
position in the LE
During merger/
acquisition of the LE
having SR
shareholder/s, where
the control would no
longer remain with the
SR shareholder/s
If the SR equity shares
are sold by an SR
shareholder who
continues to hold such
shares after the lock-in
period but prior to the
lapse of validity of such
SR equity shares

25. Regulation 42- Record date or date of closure of
transfer books
25
Intimation of record date to all the SE(s) where it is listed for the following
purposes:
• Declaration of dividend
• Issue of shares for conversion of
debentures/ any other convertible
security
• Corporate actions like mergers, de-
mergers, splits and bonus shares, where
stock derivatives are available on the
stock of LE/ where LE's stocks form part of
an index on which derivatives are
available
• Issue of rights/ bonus shares
• Shares arising out of rights attached to
debentures or any other convertible
security
• Such other purposes as may be specified
by the SE

26. Contd.
26
The LE shall recommend/ declare all dividend and/or cash bonuses at least 5
working days* before the record date fixed for the purpose
The LE shall ensure the time gap of at least 30 days between two record dates.
If the securities are in physical form- transfer books shall be substituted above in
place of record date
Notice of at least 7 working days* in advance to be given to the SE(s) of record
date specifying the purpose of the record date
In the case of rights issues, the notice shall be given at least 3 working days* in
advance- Inserted w.e.f. 26/12/2019
*The above specified dates are excluding the date of intimation and record date

27. Regulation 43- Dividends
27
 The LE shall declare and disclose the dividend on per share basis only.
 The LE shall not forfeit unclaimed dividends before the claim becomes
barred by law and such forfeiture, if effected, shall be annulled in
appropriate cases

28. Regulation 43A- Dividend distribution policy*
28
*Inserted w.e.f. 08/07/2016
A dividend distribution policy shall be formulated by top 500 LE* and
the same shall be disclosed in the annual report and their websites
*Top 500 LE shall be based on market capitalization calculated as on
March 31st of every FY.
LEs other than the aforesaid top 500 LE, may formulate a dividend
distribution policy on a voluntary basis and disclose the same in annual
reports and on their websites

29. Contd.
29
a) the circumstances under which the shareholders of LE may or may not expect
dividend
b) the financial parameters that shall be considered while declaring dividend
c) internal and external factors that shall be considered for declaration of dividend
d) policy as to how the retained earnings shall be utilized and
e) parameters that shall be adopted with regard to various classes of shares
Dividend distribution policy shall include the following parameters-
If the LE proposes to declare dividend on the basis of parameters in addition to
clauses (a) to (e) or proposes to change such additional parameters or the
dividend distribution policy contained in any of the parameters, it shall disclose
such changes along with the reason for the same in its annual report and on its
website

30. 30
Dividend distribution policy, April 2020 of Infosys

31. Contd.
31

32. Contd.
32

33. Contd.
33

34. 34
Contd.

35. 35
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