[To be published in the Gazette of India, Extraordinary, Part II, Section 3, sub-

section (i)l

Government of IndiaMinistry of Corporate Affairs

Notification

New Delhi, dated the 10th September,2018

G.S.R. _ (E).- In exercise of the powers conferred by clause (b) of sub-section

(1) of section 29 read with sub-sections (1) and (2) of section 469 of the

Companies Act 2013 (18 of 2013), the Central Government hereby makes the

following rules further to amend the Companies (Prospectus and Allotment of

Securities) Rules, 2014, namely:-

1. Short title and commencement - (1) These rules may be called the Companies

(Prospectus and Allotment of Securities) Third Amendment Rules, 2018.

(2) They shall come into force on the 2nd day of October, 2018.

2. In the Companies (Prospectus and Allotment of Securities) Rules, 2014, after

rule 9, the following rule shall be inserted, namely:-

"9A. Issue of securities in dematerialised form by unlisted public

companies.- (1) Every unlisted public company shall -(a) issue the securities only in dematerialised form; and

(b) facilitate dematerialisation of all its existing securities

in accordance with provisions of the Depositories Act, 1996 and regulations

made there under.

(2) Every unlisted public company making any offer for issue of any securities orbuyback of securities or issue of bonus shares or rights offer shall ensure thatbefore making such offer, entire holding of securities of its promoters, directors,key managerial persorurer has been demateriarised in accordance with provisionsof the Depositories Ac! 1996 and regulations made there under.(3) Every holder of securities of an unlisted public company,_

(a) who intends to transfer such securities on or after 2^d october, 201g, shalr getsuch securities dematerialised before the transfer; or(b) who subscribes to any securities of an unristed public company (whether byway of private placement or bonus shares or rights offer) on or after 2nd october,2018 shall ensure that alr his existing securities are herd in dematerialized formbefore such subscription.

(4) Every unlisted public company shall facilitate dematerialisation of all itsexisting securities by making necessary application to a depository as defined inclause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 and shalrsecure International security Identification Number (ISIN) for each type ofsecurity and shall in-form all its existing security horders about such facility.

(5) Every unlisted public company shall ensure that _

(a) it makes timely payment of fees (admission as well as annual) to thedepository and registrar to an issue and share transfer agent in accordance

with the agreement executed between the parties;

(b) it maintains securitjr deposi! at all times, of not less than two years, fees

with the depository and registrar to an issue and share transfer agen! insuch form as may be agreed between the parties; and

(c) it complies with the regulations or directions or guidelines or circulars, ifany, issued by the securities and Exchange Board or Depository from timeto time with respect to dematerialisation of shares of unlisted publiccompanies and matters incidental or related thereto.

(6) No unlisted public company which has defaulted in sub-rule (5) shall makeoffer of any securities or buyback its securities or issue any bonus or right shares

till the payments to depositories or registrar to an issue and share transfer asentare made.

(7) Except as provided in sub-rure (s), the provisions of the Depositories Acf1996' the securities and Exchange Board of India (Depositories and participants)

Regulations, 1996 and the securities and Exchange Board of India (Registrars toan Issue and share Transfer Agents) Regulations, 1993 shall apply mutatis

mutandis to dematerialisation of securities of unlisted public companies.

(8) The audit report provided under regulation 55A of the securities andExchange Board of India (Depositories and participants) Regulations, 1996 shaflbe submitted by the unlisted public company on a harf-yearly basis to theRegistrar under whose jurisdiction the registered office of the company issituated.

(9) The grievances, if any, of security holders of unlisted public companies underthis rule shatl be filed before the Investor Education and protection FundAuthority.

(10) The Investor Education and protection Fund Authority shall initiate anyaction against a depository or participant or registrar to an issue and sharetransfer agent after prior consultation with the securities and Exchange Board ofIndia.

[File No. trrt(j

Ar/f rcn X"retary to the Govemment of India

Note: - The Principal rules were published in the Gazette of India,Extraordinary, Part II, section 3, sub-section (i) vide notification number G.s.R.

251(E), dated the 31"1 March, 201,4 and were subsequently amende d oide numberG.s.R' 424(E), dated the 30n |une, 201.4 and number c.s.R. 430 (E) dated the ztr'

Map 2018 and number G.S.R. 752 @) dated the Zrr August, 201g.

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