Mumbai, Nov 17 (IANS): The Securities and Exchange Board of India (Sebi) on Friday scrapped its earlier order that provided for freezing of folios of holders of physical securities without PAN, KYC details and nomination.

The order will come into force with immediate effect, according to a Sebi circular.

Under the earlier rule, it was mandatory for all holders of physical securities in listed companies to furnish PAN, nomination, contact details, bank account details and specimen signature for their corresponding folio numbers. The folios wherein any one of such documents are not available on or after October 1, 2023, is required to be frozen by the Registrars to an Issue and Share Transfer Agents (RTA), Sebi had said in May.

In its new amendment, Sebi has stated that reference to the term 'freezing/frozen' has been deleted.

"Based on representations received from the Registrars’ Association of India, feedback from investors, and to mitigate unintended challenges on account of freezing of folios and referring frozen folios to the administering authority under the Benami Transactions (Prohibitions) Act, 1988 and/or Prevention of Money Laundering Act, 2002, it has been decided to do away with the above provisions," Sebi said.

Further, frozen folios were required to be referred by the RTA or listed company to the administering authority under the Benami Transactions (Prohibitions) Act, 1988, and/or Prevention of Money Laundering Act, 2002, if they continue to remain frozen as on December 31, 2023.