SEBI Guidelines to Demat Re-Lodged Shares

The Securities and Exchange Board of India (SEBI) has taken several steps to promote dematerialisation of shares and eliminate physical certificates from the capital markets. One key area under regulation is the re-lodgement of physical share certificates for dematerialisation, especially in cases where investors still possess physical shares or require revalidation due to old or returned documents. This article explains what re-lodgement entails, the process involved, and SEBI’s updated guidelines regarding such scenarios.

Re-lodgement refers to the act of submitting physical share certificates—either for the first time or for revalidation—to the company’s Registrar and Transfer Agent (RTA) to get them dematerialised. This process becomes necessary in the following situations:

• Physical share certificates are returned due to mismatch or incomplete documents
  

• Transfer was attempted before the SEBI ban on physical share transfers (effective from 1 April 2019) but was unsuccessful
  

• Shares were inherited or gifted and the investor now wants to convert them to demat
  

• Lost or damaged certificates have been reissued and need to be dematerialised
  

The end goal of re-lodgement is to enable electronic credit of shares into an investor’s demat account.

SEBI’s regulations are aimed at increasing transparency, preventing fraud, and improving the ease of share trading and ownership. Some important mandates include:

• Mandatory dematerialisation for transfer of securities listed on stock exchanges
  

• No physical transfer permitted post April 2019, except in cases of transmission or transposition
  

• Investors must demat re-lodged shares within a prescribed time frame
  

• Nomination facility and KYC compliance are also now linked to demat accounts for ease of succession
  

These guidelines help ensure that all market participants adopt digital holding formats, minimising the risks associated with physical share documents.

Re-lodgement and dematerialisation involve multiple steps, including documentation and communication with the RTA. Here’s how it typically works:

Step 1: Locate the Physical Certificates

Verify that the certificates are in your name and are not defaced or mutilated. If they are lost or damaged, you may first need to request a duplicate from the issuing company.

Step 2: Open a Demat Account (if not already held)

You must have an active demat account with a SEBI-registered Depository Participant (DP).

Step 3: Fill the Dematerialisation Request Form (DRF)

Collect the DRF from your DP and fill it out accurately. Details to be provided include:

• Folio number
  

• Certificate number
  

• Distinctive numbers of the shares
  

Step 4: Submit the DRF and Certificates

Submit the duly filled DRF along with the original physical certificates to your DP. Ensure that your name on the certificates matches your demat account details.

Step 5: Verification and Forwarding to RTA

Your DP will verify the documents and forward them to the RTA for validation. If re-lodgement is required (due to return or rejection), the RTA will inform you.

Step 6: Re-Lodgement with RTA

Submit the required documents as instructed by the RTA for revalidation, which may include:

• Identity and address proof
  

• Copy of PAN
  

• Supporting documents for legal heirs (in case of inheritance)
  

Once revalidated, the RTA will process the demat request.

Step 7: Shares Credited to Demat Account

Upon successful verification and approval, the shares will be electronically credited to your demat account.

SEBI has provided a framework to standardise the re-lodgement process. Key highlights include:

• Cut-off deadlines: SEBI specifies periodic cut-off dates; shares not dematerialised within these may become invalid for transfer
  

• KYC mandatory: Investors must ensure updated PAN, Aadhaar, and bank details are linked to their demat account
  

• Nomination required: A nominee must be registered or the investor must opt out formally
  

• Self-attestation: All submitted documents must be self-attested
  

• No transfer allowed: Re-lodged shares can only be dematerialised to the rightful owner’s account

These rules aim to prevent misuse of old or duplicate share certificates and enhance investor protection.

SEBI’s guidelines for demat re-lodgement have been designed to eliminate grey areas in the handling of old physical shares. Following the prescribed process and compliance norms enables smooth dematerialisation. Timely re-lodgement not only protects the investor’s rights but also aligns with SEBI’s long-term vision for a paperless and transparent capital market.

This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.