SEBI Permits Transfer and Dematerialisation of Physical Securities.
Introduction
On 30th January 2026, the Securities and Exchange Board of India (“SEBI”) issued a circular introducing a one-time regulatory framework to enable the transfer and dematerialisation of physical securities for which transfer deeds executed prior to 1 April 2019 remained unprocessed. Issued under SEBI’s Ease of Doing Investment initiative, the measure seeks to resolve legacy transfer issues and advance the transition to a fully dematerialised securities framework. This update highlights the key regulatory provisions and practical implications for investors, listed entities, registrars and transfer agents.
Time-Bound Regulatory Framework
The window shall be open for a period of one year from 05 February 2026 to 04 February 2027.
Scope and Eligibility
The facility is available in respect of physical securities where the transfer deed was executed prior to 01 April 2019, but the transfer was not lodged, rejected, returned or otherwise not processed.
Processing under this window is permitted only where the original physical security certificate is available.
Exclusions
The following cases are excluded from the scope of the special window:
- Securities involved in disputed transfer matters; and
- Securities already transferred to the Investor Education and Protection Fund.
Mode of Holding and Lock-in
All securities processed under this framework shall be credited only in dematerialised form, and no physical certificates shall be issued.
Such securities shall be subject to a mandatory lock-in period of one year, during which they cannot be transferred, pledged or liened.
Documentation and Processing
Applicants are required to submit the original physical certificates, a valid transfer deed executed prior to 01 April 2019, KYC documents, demat account details and the prescribed undertaking-cum-indemnity, along with any other documents as required.
Listed companies and their Registrars to an Issue and Share Transfer Agents are required to verify and process complete applications within 70 days of receipt.
Conclusion
The circular provides an opportunity for investors to regularise pending transfers of physical securities and supports SEBI’s objective of moving towards a fully dematerialised securities framework while strengthening investor protection.