In terms of clause (a) of Section 19(4) of FERA 1973 no person can enter transfer of securities in any register or book in which securities are registered or inscribed, if he has any ground to suspect that the transfer involves a contravention of the provisions of Section 19, i.e. issue, transfer or creation of interest in any security to/in favour of a person resident outside India. Clause (b) of this Section prohibits the registration of the foreign address of the holder of a security except by way of substitution for any such address in the same country or for which permission has been granted by Reserve Bank. Before registering any transfer of shares/securities in the names of non-residents, companies concerned must obtain permission of Reserve Bank except where such permission has already been obtained by transferor/transferee.

NOTE: See paragraphs 10C 30 and 10C 31 regarding general permission granted to Indian companies for recording overseas address consequent on change of status of the security holder from resident to non-resident or for conversion of holdings into joint holdings between residents/non-residents.