4 July, 2025-The Securities and Exchange Board of India (SEBI) has announced a special six-month window allowing the transfer of physical shares, starting from 7 July 2025. This temporary relaxation is aimed at easing the process for investors who still hold shares in physical form and have been unable to transfer them due to regulatory restrictions introduced in recent years.
In a circular issued earlier this week, SEBI stated that shareholders will be permitted to transfer physical shares to their own name or that of a relative during the period from 7 July 2025 to 6 January 2026. The transfer must be followed by mandatory dematerialisation of the securities in order to facilitate trading or further transactions.
According to SEBI, the relaxation applies only in cases where the transferor and transferee are relatives, as defined under the Companies Act. Shareholders must submit necessary documents, including the original share certificate, a valid share transfer deed, and proof of identity and relationship, to the respective company or its registrar and share transfer agent (RTA).
The move is expected to benefit thousands of retail investors, particularly those holding legacy or inherited shares that were difficult to transfer under the demat-only regime introduced in April 2019. SEBI’s circular has directed listed companies and RTAs to prepare for the processing of such transfer requests and to extend adequate assistance to shareholders during the six-month window.
Investor groups and market experts have welcomed the decision, noting that it will help resolve longstanding issues related to paper-based securities. “This step will help many genuine investors and heirs regularise their holdings, which were otherwise stuck in legal and procedural complexities,” said a senior financial analyst.
Once the shares are transferred, investors will be required to dematerialise them before engaging in any trade or further transfer. SEBI has clarified that this is a one-time opportunity and has urged investors to complete the process within the specified time frame.
The regulatory body has also reiterated its long-term objective of achieving a fully dematerialised securities market, promoting transparency, efficiency, and better record maintenance.
With this initiative, SEBI aims to strike a balance between investor protection and ease of compliance, ensuring that genuine stakeholders are not denied their rights due to procedural barriers.
