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DMAT – REVISED PROCESS FOR SUBMISSION OF OFF-MARKET TRANSFER by SEBI

Dear Valued Investor,

New Year Greetings!!!

We wish to inform you that in order to comply with SEBI Circular SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/139 dated August 08, 2023, regarding Facility to remedy erroneous transfers in demat accounts.

To comply with the SEBI guidelines as stated in above-mentioned SEBI circular, DPs are advised to note that effective from Monday, January 01, 2024, off-market transactions will be considered for execution ONLY IF, Demat Account of Buyer (i.e. Transferee Account) is added as a Beneficiary under the Demat Account of Seller (i.e. Transferor Account). CDSL system (CDAS) will not allow execution of off-market transfers without the buyer account being added, as a beneficiary under the seller account. Necessary changes towards this have been already rolled out with effect from Saturday, December 30, 2023 for ease of operations (Refer CDSL Communique No. DP-2023-745 dated December 22, 2023).

In view of the above, please follow the below steps:

  1. Registration / adding buyer account (s) as beneficiary under seller account (s) would be a mandatory requirement while executing intra-depository (i.e. within CDSL) or inter-depository (between the Depositories) off-market transactions.
  2. Seller client will have options to register the buyer account as beneficiary either through his / her DP or through his / her Easi / Easiest Login.
  3. Seller client doing the registration through his / her DP:
    • The seller client would submit a ‘Registration Form’ (RF) in pre-specified format (format is enclosed as Annexure-A).
    • While submitting the RF, the seller client would be required to provide details viz. seller demat account, buyer demat account, buyer PAN, buyer PAN exemption flag (if applicable), buyer account’s depository flag i.e., CDSL / NSDL etc. in the registration form. Post aforesaid checking, CDSL would send a link on the mobile number and email id registered in the demat account of seller client for the verification of buyer account details.
    • By clicking the said link, the seller client would be prompted to enter his / her PAN and / or 16 digits BOID to confirm his / her identity. On successful identification, details of the buyer client (s) would be displayed for verification. On verification, the seller client would be given an option to ‘OTP Authenticate’ or ‘Cancel’ the registration. For OTP authentication, CDSL will generate and send an OTP on the mobile number and email id registered in the demat account of seller client.
    • For every successful registration, buyer account details would be stored as ‘Beneficiary’ under the demat account of seller client. Registration of a buyer account under the seller account will be a ONE TIME ACTIVITY.
    • DPs / Seller clients will also be provided an option to ‘Delete’ the already added ‘Beneficiary’ account (s).
    • This pre-requisite of adding beneficiary details will be applicable to ALL ‘OFF-MARKET’ REASON CODES available in CDSL Application.
    • Once the beneficiary (ies) is (are) registered under the seller account, at the time of execution off-market transfers, CDSL Application would consider the same for further processing if and only if the buyer demat account is added as a ‘Beneficiary’ under the seller demat account. Off-market transfers would then further be processed as per the existing mechanism.
  4. Seller client doing the registration through his / her Easi / Easiest Login:
    • Alternatively, the seller client can also initiate a registration without any physical form to add ‘Beneficiary’ under his / her account through his / her Easi / Easiest Login.
    • Once the registration is initiated, subsequent registration and off-market transfer execution process will remain the same as mentioned under point number 3 of this communique mentioned above.
    • In the case of seller client executing off-market transfers through his / her Easiest Login under the ‘Trusted Account’ option where buyer demat account is added in the list of trusted accounts WILL ALSO BE required to register the same buyer demat account as a ‘Beneficiary’ for successful off-market transfers.

Queries regarding the above information may be addressed to your Depository Participant (DP) where you have opened your demat account.

FORM ATTACHED

Annexure_A