Description

SEBI opens a 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 window for transfer and dematerialisation of physical securities that were sold/purchased prior to April 01, 2019. This window will remain open for one year from February 05, 2026 to February 04, 2027. The initiative builds on a previous circular from July 02, 2025 that opened a special window for re-lodgement of transfer deeds. Transferred securities will be mandatorily credited in demat mode only and will be under lock-in for one year from the date of registration of transfer.

Key Points

  • Special window open from February 05, 2026 to February 04, 2027 (one year period)
  • Applicable to physical securities sold/purchased before April 01, 2019
  • Available for fresh lodgements and previously rejected/returned transfer requests
  • Transfer deed must be executed prior to April 01, 2019
  • Original security certificate must be available
  • Securities will be credited only in demat mode
  • One-year lock-in period from date of transfer registration
  • No transfer/lien-marking/pledging allowed during lock-in period
  • Disputes between transferor and transferee not eligible under this window
  • Securities transferred to IEPF not eligible

Regulatory Changes

This circular introduces a new special window mechanism allowing investors to transfer and dematerialise physical securities purchased before the April 01, 2019 deadline when physical transfer of securities was discontinued. The window provides relief to investors who hold physical securities but were unable to complete transfer formalities earlier.

Compliance Requirements

For Transferees (Investors):

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

For Listed Companies/RTAs/Depositories:

  • Identity Verification: Mandatorily verify PAN, identity proof and address proof of transferee(s) and transferor(s). In case of name mismatch between PAN card and transfer deed, accept additional documents (Officially Valid Document or gazette notification)
  • Signature Verification: Follow procedure laid down in Para (B) of Schedule VII of SEBI LODR Regulations, 2015 for signature differences or non-availability
  • Handle cases of non-delivery of objection memo, non-cooperation by transferor, or non-availability of required documents (specific procedures mentioned in circular)

Important Dates

  • Window Opens: February 05, 2026
  • Window Closes: February 04, 2027
  • Eligibility Cut-off: Transfer deeds executed before April 01, 2019
  • Lock-in Period: One year from date of registration of transfer

Impact Assessment

Positive Impact:

  • Provides relief to investors holding physical securities who were unable to complete transfer formalities before the April 2019 deadline
  • Enables rightful owners to access their securities and convert them to demat form
  • Covers previously rejected/returned transfer requests, giving investors a second chance
  • Facilitates ease of investing and secures investor rights

Operational Impact:

  • RTAs and listed companies will need to process transfer requests with specific documentation requirements
  • Enhanced verification procedures for identity and signatures must be implemented
  • One-year lock-in period provides safeguard against fraudulent transfers
  • Excludes disputed cases and IEPF-transferred securities, limiting scope appropriately

Market Impact:

  • Medium impact as this affects a specific subset of investors holding old physical securities
  • Does not affect current trading or newly issued securities
  • Primarily a compliance and investor protection measure rather than market-moving regulation

Impact Justification

Provides relief to investors holding physical securities purchased before April 2019, enabling them to transfer and dematerialise shares with one-year lock-in period. Applies broadly to all listed companies and RTAs.