SEBI Plans Easier Transfer of Old Physical Shares

Markets regulator SEBI has proposed new measures to make it easier for investors to transfer and dematerialise old physical shares. The aim is to simplify the process, resolve long-pending transfer issues, and ensure greater convenience for investors while keeping dematerialisation as the long-term goal.

Temporary Relaxation for Old Share Transfers

In its latest consultation paper, SEBI suggested temporarily relaxing existing rules to allow the transfer of physical shares that were lodged before April 1, 2019. This one-time exception will help investors who could not complete their transfers earlier due to various reasons, such as missing documents or untraceable sellers.

The relaxation will be time-bound, with a sunset clause to ensure that the market continues to move toward full dematerialisation. Once the relevant documents are verified by the company or its Registrar and Transfer Agent (RTA), the shares will be directly credited to the investor’s demat account.

SEBI To End the ‘Letter of Confirmation’ Step?

Currently, when investors request a share transfer, duplicate certificate, or transmission, companies issue a Letter of Confirmation (LOC). Investors must then submit this LOC to their Depository Participant (DP) within 120 days to get the shares in demat form.

If they miss this deadline, the shares are transferred to a Suspense Escrow Demat Account (SEDA), causing further delays and administrative hassles.

To make the process smoother, SEBI has proposed abolishing the LOC system altogether. Instead, companies and RTAs will directly credit the shares to the investor’s demat account after due verification. Investors will only need to provide their Client Master List (CML) details while making the request.

Revised Regulations and Extended Window

SEBI has also proposed amendments to the Listing Obligations and Disclosure Requirements (LODR) Regulations to accommodate these changes.

Earlier, the regulator had allowed investors who lodged transfer requests before April 1, 2019, to re-lodge them until March 31, 2021. Many missed this opportunity. To help such investors, SEBI has now reopened a special window from July 7, 2025, to January 6, 2026, for re-lodging transfer documents.

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Conclusion

SEBI’s new proposal aims to make the share transfer process more investor-friendly by removing unnecessary steps and offering another chance to those holding old physical shares. While these relaxations will be temporary, they align with the regulator’s broader goal of achieving maximum dematerialisation in the securities market.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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