Instrument of transfer

Physical shares change hands on paper. The seller cannot just hand over the certificate; the company has to record the new owner in its register of members. The document that tells it to do so is the instrument of transfer — in current practice Form No. SH-4.

It names the securities, the seller (transferor), the buyer (transferee) and the consideration, is signed by both sides, witnessed and stamped, and travels to the R&T agent with the original certificates.

Its importance has shrunk sharply. From 1 April 2019, SEBI stopped the processing of transfers of physical securities of listed companies unless they are first dematerialised — transmission and transposition excepted. But deeds executed before that date still turn up, and the workbook's re-lodgement windows exist precisely for them.

What the RTA checks. The original certificates and the instrument of transfer, signed by transferor(s) and transferee(s) and franked or stamped with the stamp duty, go to the RTA. It verifies the transferor's signature against the specimen on record and scrutinises the deed for:

• the proper instrument (Form No. SH-4), duly stamped, dated and executed by both parties, with the name, address and occupation (if any) of the transferee;
• validity — it is valid if presented within sixty days from the date of execution;
• correct details of the securities — company, kind or class, nominal value, folio number, certificate number, number and distinctive numbers;
• the consideration amount filled in and the deed franked or stamped;
• complete witness details;
• the certificate complying with SEBI's norms;
• transferee's signatures in the relevant two fields;
• self-attested PAN copies of all transferors and transferees.

Timelines. If there is an objection, documents are returned to the proposed transferee within 15 days of receipt. If everything is in order, the transfer is effected within 15 days; the register of members is updated and the transferee's details endorsed on the certificate.

After 1 April 2019. Requests to transfer securities are not processed unless the securities are dematerialised (transmission and transposition excepted). Investors may still hold physical shares. Deeds lodged before the deadline and returned for deficiencies could be re-lodged until 31 March 2021, with the shares issued only in demat. A special window for re-lodging deeds for physical securities sold or purchased before 1 April 2019 opened for six months from 7 July 2025 to 6 January 2026, and was extended for a further year, 5 February 2026 to 4 February 2027 — again with shares issued only in demat. LODR Regulation 40 carries the same principle.

Illustrative figures and dates. In February 2019 an investor bought 2,000 physical shares for Rs 3,40,000 from a relative. They signed an SH-4 but never lodged it. The workbook's special window lets such a pre-April 2019 deal be re-lodged.

The 60-day test, on an ordinary deed. Had a deed been executed on 12 March and presented on 11 May, that is exactly 60 days — valid. Presented on 12 May, it would be out of time.

What the RTA looks for on this deed.

The transferee's address field is blank. The RTA returns the deed with an objection within 15 days. Corrected and re-lodged inside the window, the transfer is processed — and the 2,000 shares are credited in demat form, never as a new certificate.

Chapter 13.1 (Transfer of Securities) lists the SH-4 checks, the 60-day validity and the 15-day timelines, and records the April 2019 demat-only rule and the re-lodgement windows; Chapter 14.4 cites LODR Regulation 40. Expect the 60 days, the 15 days, and a true/false on whether physical shares can still be held (yes) or transferred without demat (no).

• Valid if presented within 60 days of execution — not 60 days of purchase or of stamping.
• 15 days to return with objections, and 15 days to effect a transfer that is in order.
• Physical shares can still be held after 1 April 2019; they just cannot be transferred without being dematerialised.
• Transmission and transposition are outside the demat-only transfer rule.
• The workbook names two forms as the instrument of transfer. Section 13.1 says SH-4; section 13.3, on securities lost in transit, describes executing a fresh instrument of transfer (Form No. ISR-4) — and Annexure 13.3 uses ISR-4 as the claim form for the Suspense Escrow Demat Account. For a transfer deed, answer SH-4.
• The special window is for deals done before 1 April 2019, and every share re-lodged through it is issued in demat mode.
• Dematerialisation attracts no stamp duty, unlike a transfer of ownership.