On 27-10-2023, the Ministry of Corporate Affairs notified the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023 to amend the Companies (Prospectus and Allotment of Securities) Rules, 2014. The provisions came into force on 27-10-2023.
Key Points:
-
Rule 9 relating to “Dematerialisation of securities” has been revised and a provision has been inserted which focuses on public companies that issued share warrants prior to commencement of the Companies Act, 2013 and not converted it shares.
-
Such companies will have to inform the Registrar about the details of such share warrants in Form PAS-7, within 3 months of commencement of these amendment rules.
-
The bearers of the share warrants will have to surrender such warrants to the company and get the shares dematerialised in their account and for this purpose the company shall place a notice for the bearers of share warrants in Form PAS-8, within 6 months of commencement of these amendment rules.
-
In case the bearer of the share warrant does not surrender share warrants within 6 months then the company will convert such share warrants into dematerialised form and transfer the same to the Investor Education and Protection Fund.
-
-
Rule 9-B has been inserted relating to “Issue of securities in dematerialised form by private companies”.
-
Private companies will have to issue securities only in dematerialised form.
-
Small private companies are excluded from the purview of this Rule.
-
Any private company will have to comply with the provisions of this rule within 18 months starting from 31st March 2023.
-
The provisions of this rule will not apply in the case of a Government company.
-
-
The following Forms has been inserted-
-
Form PAS-7– relating to “Details of pending share warrants”.
-
Form PAS-8– relating to “Notice for bearers of pending share warrants”.
-
