SEBI to open special 1-year window for transfer, dematerialisation of physical securities

MUMBAI: The Securities and Exchange Board of India (SEBI) has announced a special one-year window allowing investors to transfer and dematerialise physical securities that could not be processed before April 1, 2019, due to various reasons, including procedural or documentation-related challenges.

In a statement, SEBI said it has opened a special window from February 05, 2026, to February 04, 2027, to enable such investors to regularise and complete the transfer cum dematerialisation of securities. The move will take effect on February 05, 2026.

This step would facilitate these investors’ rightful access to their property. The window shall also be available for such transfer requests that were submitted earlier and were rejected/returned/not attended to due to a deficiency in the documents/process/or otherwise, the markets regulator said.

Also, separately, SEBI has done away with the requirement for issuing a Letter of Confirmation (LOC) for the credit of securities to investors’ dematerialisation accounts, a move aimed at simplifying processes and sharply reducing timelines.

In a circular, the markets regulator said listed companies and registrars will now directly credit securities to investors’ demat accounts after completing due diligence, eliminating the need for an LOC to be routed through depository participants.

At present, listed companies and Registrars to an Issue and Share Transfer Agents (RTAs) issue a Letter of Confirmation (LOC) to investors, which is submitted to the Depository Participant for credit of securities. This process typically takes around 150 days. “In order to enhance investor convenience and reduce timelines and risks, SEBI has decided to do away with the requirement of issuance of LOC,” SEBI said.

Under the revised framework, RTAs and listed companies shall directly credit securities to the demat account of the investor, after carrying out necessary due diligence. This measure is expected to reduce the timeline for credit of securities from approximately 150 days to 30 days, while also mitigating risks associated with loss or pilferage of LOC.

The new provisions shall come into force with effect from April 02, 2026. Any LOC issued prior to this date may continue to be used by investors for dematerialisation within the prescribed timeline. “This initiative is aimed at improving ease of doing investment, enhancing operational efficiency and strengthening investor protection”, SEBI said. (ANI)