Archive · 31 Jan 2026
SEBI Eliminates LOC System from 2026
The Securities and Exchange Board of India (SEBI) has decided to stop using a special document called a Letter of Confirmation (LOC) starting from April 2026.
This document was previously needed for things like getting duplicate shares or transferring shares.
Now, companies and their agents will directly put shares into investors' demat accounts, which are like digital wallets for shares.
This change will make the process faster, taking about 30 days instead of up to 150 days.
It will also reduce the chances of losing or misusing the LOC documents.
Additionally, SEBI has opened a special one-year window from February 5, 2026, to February 4, 2027, to help investors transfer and dematerialise their physical securities.
The main goal is to make investing easier and safer for everyone.
SEBI will eliminate the LOC system for investor service requests starting April 2, 2026.
The new process will allow direct credit of securities to demat accounts after due diligence.
The timeline for credit will reduce from up to 150 days to approximately 30 days.
The change aims to enhance investor convenience, reduce delays, and eliminate risks associated with LOCs.
Existing LOCs issued before the implementation date will remain valid within the current timeline.
- Who
- Securities and Exchange Board of India (SEBI), listed companies, Registrars to an Issue and Share Transfer Agents (RTAs), investors, Depository Participants (DPs)
- What
- Elimination of the Letter of Confirmation (LOC) system for investor service requests and introduction of a special window for transfer and dematerialisation of physical securities
- When
- Effective from April 2, 2026 for LOC elimination and February 5, 2026 for the special window
- Where
- India
- Why
- To simplify and accelerate the dematerialization process, reduce delays, enhance investor protection, and provide relief to investors with pending physical securities
Pro-Change
Status Quo
Process Efficiency
Pro-Change
The new system will streamline the process, reducing the timeline from 150 days to 30 days, enhancing operational efficiency.
Status Quo
The current system with LOCs has been in place for a long time and is familiar to all stakeholders.
Investor Convenience
Pro-Change
Direct crediting of securities to demat accounts will eliminate risks associated with LOCs and improve investor convenience.
Status Quo
The existing LOC system provides a documented trail, which some investors and agents might prefer for transparency.
- Current Process Duration
- Up to 150 days
- New Process Duration
- Approximately 30 days
- Implementation Date
- April 2, 2026
- Entities Involved
- Listed Companies, RTAs, Depository Participants (DPs)
- Purpose of Change
- Enhance investor convenience and operational efficiency
- Benefits
- Reduced delays, elimination of LOC-related risks, streamlined process
- Special Window for Physical Securities
- February 5, 2026 to February 4, 2027
Sources
SEBI ends LOC system from April 2026: Demat credit process to shrink from 150 days to 30
SEBI Scraps Letter Of Confirmation Requirement, Slashes Securities Credit Timeline From 150 To 30 Days
SEBI opens special window for transfer, demat of physical securities from Feb 5
