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

section (i)l

Government of India
Ministry 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 or
buyback of securities or issue of bonus shares or rights offer
shall ensure that
before making such offer, entire holding of securities of its
promoters, directors,
key managerial persorurer has been demateriarised in accordance
with provisions
of 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 get
such securities dematerialised before the transfer; or

(b) who subscribes to any securities of an unristed public

company (whether by
way 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 form
before such subscription.

(4) Every unlisted public company shall facilitate dematerialisation

of all its
existing securities by making necessary application to a depository
as defined in
clause (e) of sub-section (1) of section 2 of the Depositories
Act, 1996 and shalr
secure International security Identification Number (ISIN) for
each type of
security and shall in-form all its existing security horders about
such facility.

(5) Every unlisted public company shall ensure that _

(a) itmakes timely payment of fees (admission as well as annual) to the

depository 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!
in
such form as may be agreed between the parties; and
(c) it complies with the regulations or directions or guidelines or circulars, if
any, issued by the securities and Exchange Board or Depository
from time
to time with respect to dematerialisation of shares of unlisted public
companies and matters incidental or related thereto.

(6) No unlisted public company which has defaulted in sub-rule (5) shall make
offer 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
asent
are made.

(7) Except as provided in sub-rure (s), the provisions of the Depositories

Acf
1996' the securities and Exchange Board of India (Depositories
and participants)
Regulations, 1996 and the securities and Exchange Board of India
(Registrars to
an 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 and
Exchange Board of India (Depositories and participants) Regulations,
1996 shafl
be submitted by the unlisted public company on a harf-yearly basis to the
Registrar under whose jurisdiction the registered office of the company
is
situated.
 (9) The grievances,if any, of security holders of unlisted public companies under
this rule shatl be filed before the Investor Education and protection Fund
Authority.

(10) The Investor Education and protection Fund Authority

shall initiate any
action against a depository or participant or registrar to an issue and
share
transfer agent after prior consultation with the securities and Exchange Board
of
India.

[File No. trrt(j2013-CL-VI

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
number
G.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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