So we thought of putting up the same on our website to help millions of such aggrieved investors.
Before we go through the process of transmission of Shares, let us first understand the difference between Transfer of Shares and Transmission of Shares.
Transfer of Shares: In the stock market, we daily buy and sell shares either on Listed Exchanges i.e. NSE or BSE or do Off-Market Transaction in Unlisted Market. So this process of selling shares from “Investor A” to “Investor B” is basically called as Transfer of Shares.
Transmission of Shares: The word ‘transmission’ means devolution of title to shares otherwise than by transfer, for example, devolution by death, succession, inheritance, bankruptcy, marriage, etc.
As we have understood the basic difference between the two terms:
1. Transmission
2. Transfer
We will move forward and cover different scenarios to understand more about the transmission of shares:
Case 1: Transmission of Security in case of Joint holding+ No Will+ No Nominee Available
In case the deceased was holding a joint account, the surviving holder will request the DP (Depository Participant) by duly filling “Transmission Form” along with notarized Death Certificate of the deceased to transmit shares in his/her name. The surviving shares holder must have Demat account with either with same DP or different DP.
The DP after receiving the above documents examine the case, if found fit, will transfer shares in the name of heir and close the account of the Deceased.
Case 2: Transmission of Security in case of Single holding+ No Will+ No Nominee Available
In case of death of the sole holder, the legal heir of the deceased must request to DP (Depository Participant) for transmission of shares in his/her name by duly filling the “Transmission Form” along with following documents:
a) A copy of the notarized death certificate.
b) A copy of the Succession certificate duly notarised or an order of a court of competent jurisdiction where the deceased has not left a Will.
c) Copy of the Probate or Letter of Administration duly notarized.
However, if the legal heir expresses inability in producing the forms mentioned at “b” or “c” above due to any reason, and if the market value of the Securities on date of filing the application for transmission is less than 1 lakh, the DP (Depository Participant) can transfer shares on the basis of below mentioned forms in addition to form “a” above.
“Letter of Indemnity supported by a surety on the non-judicial stamp paper by the applicant, Affidavit and No Objection Certificate from all the legal heirs”
The DP after receiving the above documents examine the case, if found fit, will transfer shares in the name of heir and close the account of the Deceased.
Case 3: Transmission of Security in case of Single holding or Joint Holders+ Nominee available
In case of death of either Single Holder or Joint Holders both, the nominee must request to DP (Depository Participant) by duly filling only “Transmission Form” along with the Death Certificate to transfer shares in his/her name. The facility of Nominee if given at the time of opening account with DP can eliminate the cumbersome process of legal compliances.
Transmission form link: https://nsdl.co.in/downloadables/annex-o.pdf
Note:
According to new SEBI guidelines, no transaction for the transfer of securities of a listed company, at a stock exchange or off-market transactions ( Unlisted Shares ) between buyers and sellers, can happen in physical certificate form. The shares need to be first converted into Demat form then only they can be sold in the market. So, all shares held in physical after 01.04.2019 will become illiquid except for transmission and transposition. Transmission (transfer to heirs in case of death of the owner) would be possible in case of inheritance but the new owners will have to dematerialize the shares if they wish to sell or further.
Therefore, in our case of Transmission of shares, the ownership of the shares can be changed without the Demat account but to sell those shares in the market after getting ownership they need to first convert them in Demat form.
So if any of you is facing any issue regarding selling shares of deceased person, change of nomination, sign mismatch issue while conversion of shares or any legal advice on different case scenarios can contact our team of expert by dropping an email at support@iepfzone.com or can WhatsApp at 08010009625 to Mr. Dinesh Gupta, Co-founder of IEPFZone.com Our team will take you through the cumbersome process of such transmission without any hassles.