Special Window for Transfer and Dematerialisation of Physical Securities

Description

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

Summary

SEBI has opened a special one-year window from February 5, 2026 to February 4, 2027 for transfer and dematerialisation of physical securities that were sold/purchased prior to April 1, 2019. This facility is available for fresh lodgements and previously rejected transfer requests. Transferred securities will be credited only in demat mode and will be subject to a mandatory one-year lock-in period from the date of transfer registration.

Key Points

• Special window opens February 5, 2026 and closes February 4, 2027 (one-year period)
• Applies to 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 applies from date of transfer registration
• Securities cannot be transferred, lien-marked, or pledged during lock-in period
• Transfer deed must have been executed before April 1, 2019
• Original security certificate must be available
• Disputes between transferor and transferee are not eligible
• Securities transferred to IEPF are not eligible

Regulatory Changes

This circular builds upon the previous special window opened via circular dated July 2, 2025 for re-lodgement of transfer deeds. The current window expands the facility to include dematerialisation along with transfer, providing additional relief to investors holding old physical securities.

Compliance Requirements

For Transferees (Investors):

Mandatory documents to be submitted:

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

For Listed Companies/RTAs/Depositories:

• Identity Verification: Mandatory verification of PAN, identity proof, and address proof for both transferee(s) and transferor(s)
• Name Mismatch: In case of mismatch between PAN card name and transfer deed name, accept additional documents (Officially Valid Document or gazette notification for name change)
• Signature Verification: Follow procedures in Para (B) of Schedule VII of SEBI LODR Regulations 2015 for signature differences or non-availability
• Non-cooperation Cases: Special procedures apply for non-delivery of objection memo, non-cooperation by transferor, or non-availability of required documents

Important Dates

• January 30, 2026: Circular issued
• February 5, 2026: Special window opens
• February 4, 2027: Special window closes
• Lock-in Period: One year from date of transfer registration for all securities transferred through this window

Eligibility Matrix

Impact Assessment

Positive Impacts:

• Provides relief to investors holding physical securities purchased before dematerialisation became mandatory
• Helps investors secure rightful access to their securities
• Facilitates ease of investing and protects investor rights
• Offers second chance for previously rejected transfer requests

Operational Impacts:

• RTAs and listed companies must establish processes to handle transfer requests under this special window
• Enhanced verification requirements for identity and signatures
• One-year lock-in creates restrictions on transferability, protecting against fraudulent transfers
• Workload increase expected for RTAs during the window period

Limitations:

• Dispute cases between transferor and transferee must be settled through court/NCLT process
• IEPF-transferred securities are excluded
• Original certificates must be available (no duplicate certificate route through this window)
• Transfer deeds must have been executed before April 1, 2019

Impact Justification

Provides one-year special window for investors holding physical securities purchased before April 2019 to transfer and dematerialize them. Impacts RTAs, listed companies, and investors with old physical certificates. Includes mandatory 1-year lock-in period.