Description

SEBI opens a one-year special window from February 5, 2026 to February 4, 2027 for transfer and dematerialization of physical securities sold/purchased prior to April 1, 2019.

Summary

SEBI has opened a special window for transfer and dematerialisation of physical securities that were sold/purchased prior to April 1, 2019. This window will be operational for one year from February 5, 2026 to February 4, 2027. The initiative aims to facilitate ease of investing and secure investor rights in securities. Transferred securities will be credited only in demat mode and will be under lock-in for one year from the date of transfer registration.

Key Points

  • Special window opens February 5, 2026 and closes February 4, 2027 (one-year period)
  • Applicable for physical securities sold/purchased before April 1, 2019
  • Available for fresh lodgements and previously rejected/returned transfer requests
  • Transferred securities must be credited in demat mode only
  • Mandatory one-year lock-in period from date of transfer registration
  • Securities cannot be transferred, lien-marked, or pledged during lock-in period
  • Requires original security certificate and transfer deed executed prior to April 1, 2019
  • Disputes between transferor and transferee not eligible under this window
  • Securities transferred to IEPF not eligible for this window

Eligibility Matrix

Eligible Cases:

  • Transfer deed executed before April 1, 2019, NOT lodged before April 1, 2019, with original certificate available
  • Transfer deed executed before April 1, 2019, previously lodged and rejected/returned, with original certificate available

Ineligible Cases:

  • Transfer deed executed before April 1, 2019, already lodged before April 1, 2019, without original certificate
  • Transfer deed executed before April 1, 2019, NOT lodged before April 1, 2019, without original certificate

Compliance Requirements

For Transferees (Mandatory Documents):

  1. Original security certificate(s)
  2. Transfer deed executed prior to April 1, 2019
  3. Proof of purchase by transferee (as available)
  4. KYC documents as per ISR forms
  5. Latest Client Master List (CML) not older than 2 months, attested by Depository Participant
  6. Undertaking cum Indemnity as per Annexure-A format

For Listed Companies/RTAs/Depositories:

Identity Verification:

  • Mandatory verification of PAN, identity proof, and address proof of transferee(s) and transferor(s)
  • In case of name mismatch between PAN card and transfer deed, additional documents required (Officially Valid Document or gazette notification for name change)

Signature Verification:

  • Follow procedure laid down in Para (B) of Schedule VII of SEBI LODR Regulations, 2015 for signature differences or non-availability of transferor signature

Non-cooperation/Non-delivery Cases:

  • Specific procedures apply for non-delivery of objection memo, non-cooperation, inability to trace transferor, or non-availability of required documents

Important Dates

  • Circular Reference Date: January 30, 2026
  • Window Opens: February 5, 2026
  • Window Closes: February 4, 2027
  • Cut-off for Eligible Transactions: Securities sold/purchased prior to April 1, 2019
  • Lock-in Period: One year from date of transfer registration
  • CML Validity: Not older than 2 months from submission date

Impact Assessment

Positive Impacts:

  • Provides relief to investors holding old physical securities with unresolved transfer issues
  • Facilitates conversion to demat mode, improving security and ease of trading post lock-in
  • Addresses cases previously rejected due to documentation deficiencies
  • Strengthens investor protection and rights in legacy holdings

Limitations:

  • Limited to pre-April 1, 2019 transactions only
  • One-year lock-in restricts immediate liquidity
  • Requires cooperation from transferor and availability of original certificates
  • Dispute cases excluded and must go through court/NCLT process
  • IEPF-transferred securities not covered
  • Non-availability of transferor or documents may create processing challenges

Stakeholder Impact:

  • Investors: Opportunity to regularize old physical securities holdings
  • RTAs: Increased processing workload during the one-year window
  • Listed Companies: Need to coordinate with RTAs for verification and processing
  • Depositories: Must facilitate demat credit with lock-in marking

Impact Justification

Special window provides investors with opportunity to transfer and demat old physical securities, but applies to limited cases (pre-April 2019 transactions) with specific eligibility criteria and one-year lock-in period.