Bad Delivery

What is Bad Delivery?

The term “Bad Delivery” is used to describe a stock that can not be transferred because of faulty paperwork or some other fairly innocuous cause. Simply put, the delivery of these stocks are stopped because of strict regulatory and/or legal rules.
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The delivery of a share certificate, alongside a deed of transfer, can be deemed defective for one or more of the following reasons:

  • The share certificate does not contain a company seal or contains a mutilated seal
  • Call money not paid and the call date expired
  • Overwriting
  • Correction
  • Erasing of content
  • Alteration in the total number of shares
  • The certificate is badly patched up or torn
  • Certain details are mutilated
  • Deed of transfer is not mentioned in the prescribed (standard) form
  • Certain particulars are illegible
  • There are differences in the transferor’s name on the deet and the certificate
  • Transferor’s signature attested without the name and address of the signatory
  • Transfer certificate is signed by someone illegible – e.g. a minor, a lunatic or any person who is being subjected to insolvency proceedings

Please note that a bad delivery won’t be accepted by a buying broker. In the event you have been offered a bad delivery by your broker, he is lawfully obliged to make all necessary correction by producing a replacement of the deed of transfer or certificate.

 

Edited and Updated 08th January 2014

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