SEBI Operationalises Lock-In Mechanism For Pledged Shares Under ICDR Rules

The Securities and Exchange Board of India (SEBI) on Wednesday put in place a mechanism to ensure that pledged shares remain locked in during the required period under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

The regulator stated that as per its notification dated March 21, 2026, specified securities on which lock-in cannot be created may be recorded as “non-transferable” by depositories for the duration of the applicable lock-in period.

To implement this, depositories have issued a framework for companies, requiring them to update their Articles of Association, inform lenders/pledgees, and make necessary disclosures in offer documents.

SEBI further stated that depositories have made necessary changes to their systems and processes. Accordingly, it directed all stakeholders, including stock exchanges, depositories, merchant bankers, and issuers, to ensure compliance with the lock-in mechanism for pledged shares.