The Securities and Exchange Board of India issued a circular dated April 8, 2026 to streamline the lock-in mechanism for pledged shares under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The amendment allows specified securities, where lock-in cannot be created in the traditional manner, to be marked as “non-transferable” by depositories during the lock-in period. To operationalise this framework, depositories have prescribed requirements such as incorporating relevant provisions in the Articles of Association, issuing necessary intimations to lenders or pledgees, and ensuring appropriate disclosures in offer documents. Depositories have also updated their systems and processes to facilitate implementation. The circular mandates that stock exchanges, depositories, merchant bankers, and issuers ensure compliance with this mechanism. It has been issued under statutory powers to protect investor interests and promote efficient regulation and development of the securities market.
Securities and Exchange Board of India
Circular No. HO/49/(17)2026-CFD-POD2/I/8965/2026 April 8, 2026
To,
All recognised Stock Exchanges
All Depositories
All registered Merchant Bankers
Madam / Sir,
Subject: Ease of doing business – mechanism for lock-in of pledged shares under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018
1. SEBI vide notification dated March 21, 2026 has amended the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR Regulations”), to inter-alia, provide that specified securities on which lock-in cannot be created, may be recorded as “non-transferable” by Depositories for the duration of the applicable lock-in period.
2. To operationalise this, the Depositories have issued the framework to be followed by issuers including, inter-alia, incorporation of suitable provisions in the Articles of Association, issuance of necessary intimations to the concerned lenders / pledgees, and suitable disclosures in the offer documents.
3. The Depositories have made necessary changes to their systems and processes.
4. Accordingly, Stock Exchanges, Depositories, Merchant Bankers and issuers shall ensure compliance with the mechanism for lock-in of pledged shares.
5. This Circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 and Section 26(3) of the Depositories Act, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
6. This Circular is available at www.sebi.gov.in under the link “Legal-Circulars”.
Yours faithfully,
Raj Kumar Das
Deputy General Manager
Corporation Finance Department
Policy and Development-2
+91-22-26449253
rajkd@sebi.gov.in
