Description

SEBI opens one-year special window from February 05, 2026 to February 04, 2027 for transfer and dematerialisation of physical securities sold/purchased prior to April 01, 2019.

Summary

SEBI has opened a special one-year window from February 05, 2026 to February 04, 2027 for transfer and dematerialisation of physical securities that were sold/purchased prior to April 01, 2019. This window is available for both fresh lodgement and previously rejected/returned transfer requests. Transferred securities will be mandatorily credited in demat form and locked-in for one year.

Key Points

  • Special window period: February 05, 2026 to February 04, 2027 (one year)
  • Applicable to physical securities sold/purchased before April 01, 2019
  • Available for fresh lodgement and previously rejected/returned transfer requests
  • Original security certificate must be available
  • Transferred securities mandatorily credited in demat mode only
  • One-year lock-in from date of transfer registration
  • Securities cannot be transferred/lien-marked/pledged during lock-in period
  • Dispute cases and IEPF-transferred securities excluded

Regulatory Changes

This circular builds upon the July 02, 2025 circular that opened a special window for re-lodgement of transfer deeds. The current window expands the scope to include dematerialisation along with transfer, providing investors another opportunity to secure rights in their physical securities purchased before the April 01, 2019 demat-only regime.

Compliance Requirements

For Transferees (Investors):

  • Submit original security certificate(s)
  • Provide transfer deed executed prior to April 01, 2019
  • Provide proof of purchase (as available)
  • Submit KYC documents as per ISR forms
  • Provide latest Client Master List (CML) not older than 2 months, attested by Depository Participant
  • Submit Undertaking cum Indemnity as per Annexure-A format

For Listed Companies/RTAs/Depositories:

  • Verify PAN, identity proof, and address proof of transferees and transferors
  • Handle name mismatches through additional documentation (Officially Valid Document or gazette notification)
  • Follow signature verification procedures per Schedule VII of SEBI LODR Regulations, 2015
  • Process non-delivery cases and unavailable documents as per prescribed procedures

Eligibility Matrix:

  • Transfer deed executed before April 01, 2019: Required
  • Original security certificate available: Required
  • Previously lodged transfers (rejected/returned): Eligible
  • Fresh lodgement: Eligible if above conditions met

Important Dates

  • Circular Date: January 30, 2026
  • Window Opening Date: February 05, 2026
  • Window Closing Date: February 04, 2027
  • Lock-in Period: One year from date of transfer registration
  • CML Validity: Not older than 2 months

Impact Assessment

Investor Impact: Provides relief to investors holding physical securities purchased before April 2019 who were unable to complete transfer/demat earlier. Beneficial for those with rejected/returned requests. However, one-year lock-in restricts liquidity.

Market Impact: Limited direct market impact as these are legacy physical holdings. May help clean up pending transfer cases and bring more securities into demat form, improving market integrity.

Operational Impact: Requires RTAs and listed companies to process legacy transfer requests with enhanced verification procedures. Depositories need to handle mandatory demat credits and lock-in implementation.

Exclusions: Cases involving transferor-transferee disputes must be settled through court/NCLT. Securities already transferred to IEPF cannot be processed under this window.

Impact Justification

Provides limited-time opportunity for investors holding physical securities purchased before April 2019 to transfer and dematerialize. Impacts RTAs, listed companies, and investors with physical certificates but not routine market operations.