Still holding paper shares? Why claiming them can be difficult and how to convert them to demat

Many investors and their families across India still hold old physical share certificates issued decades ago, which are often discovered while sorting through inherited documents, family lockers or forgotten investment files. Frequent posts on social media show people finding paper shares that had remained untouched for years, with some even seeking advices on what to do with them.

If you come across such certificates, it is important to know that converting them into demat holdings may be tricky. Decades-old records, missing documents and other succession-related issues can make the process lengthy and complicated, especially when the original shareholder is no longer alive.

In order to help investors resolve such legacy issues, the Securities and Exchange Board of India (SEBI) has introduced a series of measures. The latest effort includes a special window for eligible physical shareholdings and a simplified framework for transmission of securities.

SEBI extends relief for investors

SEBI’s January 2026 circular provides a special window to help shareholders transfer and convert old physical share certificates into demat form. The facility will apply to shares that were bought or sold before April 1, 2019, and is aimed at helping investors obtain rightful access to their holdings.

It is restricted to bona fide and uncontested cases and does not cover disputed matters or shares that are already transferred to the Investor Education and Protection Fund, the circular read.

The special window opened on February 5, 2026, and will remain open till February 4, 2027, for eligible legacy physical shareholding cases. The framework also includes safeguards such as compulsory dematerialisation, a one-year lock-in, indemnities and public notices.

SEBI eases transmission rules for shareholders

SEBI has separately approved the norms for a simplified and standardised framework earlier for the transmission of securities, which is aimed at making the process easier for legal heirs and nominees.

The new framework provides for faster processing of small-value claims, raises the threshold for simplified documentation and reduces procedural requirements. In certain cases, it also allows relaxation of probate requirements, which could help families claim shares and other securities more quickly after the death of the original holder.

Though paper stocks are still considered valid, you need to convert them into electronic format to execute any market transactions. Demat accounts are essential for anyone wishing to trade in the Indian stock market. These accounts are offered by depository agencies, primarily CDSL and NSDL, both of which are registered with the market regulator.

How an investor can convert their shares?

The transferee shall be mandatorily required to submit the following documents to convert their paper shares into demat holdings:

• Original security certificates
• Transfer deed executed prior to April 01, 2019
• Proof of purchase by transferee, as may be available
• KYC documents of the transferee
• Latest client master list, not older than 2 months, of the demat account of the transferee, duly attested by the depository participant
• Undertaking cum Indemnity bond as per the prescribed format

Once you have these documents, contact your depositary participant (DP) and submit a request to convert your physical share certificates into digital form, which will then be credited to your demat account.

You are supposed to particularly ask for a dematerialisation request form and must open a demat account beforehand.