SEBI Revises LODR Framework for Securities Transfer and Transmission
SEBI has amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR) to change where listed entities must look for the procedure that governs transfer and transmission of securities. The SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2026 are dated 10 July 2026, came into force on that date, and were placed on SEBI's website on 14 July 2026.
The amendment is short. It revises Regulation 40(7) and Regulation 61(4) and omits clause C of Schedule VII. Its effect is larger than the text suggests: listed entities must now follow the transfer and transmission procedure that SEBI specifies from time to time, instead of treating Schedule VII as the complete procedural code.
What changed
| Provision | Before 10 July 2026 | From 10 July 2026 |
|---|---|---|
| Regulation 40(7) (specified securities) | Comply with the procedure for transfer and transmission in Schedule VII | Comply with the procedure for transfer and transmission as specified by the Board from time to time |
| Regulation 61(4) (non-convertible securities) | Transfer and transmission procedure linked to Schedule VII | Procedure as specified by the Board from time to time |
| Schedule VII, clause C | Contained procedural steps for transfer and transmission | Omitted |
Regulation 40(7)
Regulation 40 deals with transfer, transmission and transposition of securities. The obligation to follow a prescribed procedure stays; only its source moves from a schedule to the regulations to SEBI's own directions. A compliance matrix built once around Schedule VII is therefore no longer enough. Teams must watch circulars, master circulars and clarifications and apply the version in force on the date a request is processed.
Regulation 61(4)
Regulation 61(4) applies to listed non-convertible debt securities and non-convertible redeemable preference shares. The same change applies here, so the equity-side and debt-side procedures now come from one SEBI-specified framework. Debt-listed entities without listed equity must also review their processes. Entities with both kinds of securities should make sure both teams work from the same current procedure.
Clause C of Schedule VII
With clause C omitted, a historical copy of Schedule VII, or an internal SOP built around it, cannot be relied on as proof that the entity follows the current process. SEBI can now revise operational steps by circular without amending the regulations each time.
What listed entities should do now
- Map the references. The company secretary or compliance officer should list every policy, checklist, board note, investor-service manual and regulatory tracker that cites Regulation 40(7), Regulation 61(4) or clause C of Schedule VII, and re-point each to the current SEBI directions.
- Review the RTA arrangement. The registrar and transfer agent may do the operational work, but the LODR obligation stays with the listed entity. Service agreements and responsibility matrices should say who tracks new SEBI requirements, who changes the process and how the entity checks implementation.
- Test investor-service workflows. Cover intake of requests, document scrutiny, communication of deficiencies, audit trails, approvals and reporting of pending cases, including transmission after death and cases where records do not match.
- Keep a controlled repository. Record each applicable SEBI instrument with its reference number, date, effective date, subject and the internal process it affects, with a named owner responsible for updates.
Audit and governance
Audit committees need not supervise individual requests, but they should get assurance that the control framework has been updated. A short compliance note can explain the amendment, list affected processes and record the SEBI directions mapped and any change to RTA arrangements.
Secretarial and internal audit programmes also need a change. A test that only asks whether Schedule VII was followed is now incomplete. The auditor should establish which SEBI requirements applied during the review period, whether the entity and its RTA adopted them, and whether each case was processed under the correct version. Updated SOPs, change approvals, RTA correspondence, staff instructions and sample testing results are the evidence to keep.
The amendment does not create a new filing or a new governance code. It moves procedural detail to a framework SEBI can change quickly, so the compliance response has to be continuing ownership and version control shared by the company secretary, compliance officer, finance, legal and the RTA.
Updated on 28 September 2026: added the official SEBI regulation page and a before-and-after table, and cross-checked the amended wording of Regulations 40(7) and 61(4) and the omission of Schedule VII clause C.
