SEBI issues circular on mechanism for lock-in of pledged shares

In a move aimed at improving ease of doing business, the Securities and Exchange Board of India (SEBI) on Wednesday (April 8) issued a circular laying down a mechanism for the lock-in of pledged shares.The market regulator said that where lock-in cannot be created on certain securities, such shares “may be recorded as ‘non-transferable’ by Depositories for the duration of the applicable lock-in period.” The clarification follows SEBI’s amendment to the ICDR Regulations, notified on March 21, 2026.To implement the framework, depositories have been asked to put in place systems requiring issuers to incorporate relevant provisions in their Articles of Association, inform lenders or pledgees, and make appropriate disclosures in offer documents. “The Depositories have made necessary changes to their systems and processes,” SEBI noted in the circular.SEBI has directed stock exchanges, depositories, merchant bankers and issuers to ensure compliance with the new mechanism. The regulator said the move is aimed at protecting investor interests while ensuring smoother regulatory processes in the securities market.Also read: IPOs worth nearly $6.5 billion may benefit from SEBI relief, but that may not be enough