Regulatory update – India

In October 2023, the Ministry of Corporate Affairs of India amended the Companies (Prospectus and Allotment of Securities) Rules, 2014.

This amendment extends the requirement to convert physical shares to electronic form from listed companies to all private companies. The process must be completed by September 30, 2024. Going forward, any further securities should be issued in dematerialized form.

The amendment’s goal is to strengthen the efficiency and transparency of shareholding management.

Failure to comply can incur significant financial penalties both for companies and their officers. Additionally, companies will not be able to issue or allot any securities, while shareholders will be unable to sell non-dematerialized shares or subscribe to new ones.