SEBI Proposes Relaxation for Pre-2019 Physical Transfers and Easier Dematerialisation

Consultation Paper Dated 17.10.2025

The Securities and Exchange Board of India (SEBI) has released a consultation paper proposing amendments to specific provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations).

The proposals aim to simplify investor service processes and resolve long-standing issues related to the transfer and dematerialisation of securities.
SEBI has invited public comments and stakeholder feedback on these proposals by 7th November 2025.

1. Transfer of Pre-2019 Physical Securities

1.1 Background and Issue

SEBI had previously mandated that all transfers of securities be carried out only in dematerialised form with effect from April 1, 2019. However, certain investors who had executed physical transfer deeds before this date were unable to re-lodge them within the earlier extended deadline of March 31, 2021, leading to hardship in effecting valid transfers.

1.2 Proposed Amendment

To address this, SEBI has proposed to:

• Allow another opportunity for investors to submit transfer requests relating to physical securities executed prior to April 1, 2019;
• Permit such transfers to be processed by listed entities and their Registrar and Transfer Agents (RTAs) after conducting appropriate due diligence; and
• Mandate that once the transfer is completed, the securities shall be credited only in dematerialised form to the transferee’s account.

This change is aimed at providing a one-time relief to affected investors while ensuring compliance with the dematerialisation framework.

2. Simplification of the Dematerialisation Process

2.1 Current Procedure

At present, listed entities and RTAs issue a “Letter of Confirmation” to investors after processing their service requests—such as transmission, transposition, or name correction—before the securities are credited to the investor’s demat account.

2.2 Proposed Change

SEBI has proposed to eliminate the requirement of issuing a Letter of Confirmation.
Instead, post-verification, RTAs and listed entities would directly credit the verified securities to the investors’ demat accounts.

This measure would simplify and expedite the dematerialisation process, reduce paperwork, and enhance investor convenience.

3. Objective and Impact

The proposals are designed to:

• Enhance operational efficiency in securities transfer and demat processes,
• Provide relief to investors impacted by earlier procedural deadlines, and
• Align processes with a fully digital, paperless securities market framework.

By seeking stakeholder input, SEBI aims to ensure that the final amendments are balanced, practical, and investor-friendly.

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