Sebi eases rule for Holders of Physical Securities without PAN and KYC details

The capital markets regulator Sebi agreed on Friday to remove the requirement for all holders of physical securities to freeze their folios in the absence of a PAN, KYC details, and nomination.

The change, which is aimed at simplifying the rule, would take effect immediately, according to a circular issued by the Securities and Exchange Board of India (Sebi).

Following feedback from the Registrars’ Association of India and investors, the decision was made.

The rule required all holders of physical securities in listed companies to provide their PAN, nomination, contact information, bank account information, and specimen signature for their associated folio numbers.

The folios in which any one of these papers is not available on or after October 1, 2023, must be frozen by the Registrars to an Issue and Share Transfer Agents (RTA), according to Sebi in May.

Sebi stated that the term ‘freezing/frozen’ has been removed from the circular released in May.

“Based on representations received from the Registrars’ Association of India, feedback from investors, and to mitigate unintended challenges on account of freezing of folios and referring frozen folios to the administering authority under the Benami Transactions (Prohibitions) Act, 1988 and/or Prevention of Money Laundering Act, 2002, it has been decided to do away with the above provisions,” Sebi said in a press release.

Furthermore, frozen folios were required to be referred to the administering authorities by the RTA or listed business under the Benami Transactions (Prohibitions) Act, 1988, and/or the Prevention of Money Laundering Act, 2002, if they remained frozen as of December 31, 2025.