Home » Knowledge Hub » SEBI Notifies LODR (Amendment) Regulations, 2026 – Restructuring the HVDLE Framework and Investor Services

SEBI Notifies LODR (Amendment) Regulations, 2026 – Restructuring the HVDLE Framework and Investor Services

January 30, 2026

1. Introduction:

The Securities and Exchange Board of India (SEBI) has notified the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2026, published in the Official Gazette on January 20th, 2026. The amendments have come into force with immediate effect from the date of publication.

The notified changes span:

  • investor service mechanisms for listed securities;
  • treatment of unclaimed interest and redemption amounts;
  • a comprehensive restructuring of the High Value Debt Listed Entity (HVDLE) regime under Chapter V of the LODR Regulations.

This note summarises the notification and highlights the practical compliance impact.

2. Amendments Relating to Investor Services:

  • Direct Credit of Securities – Substitution of Regulation 39(2) Regulatory change: Regulation 39(2) has been substituted to mandate that listed entities shall effect credit of securities in dematerialised form pursuant to investor service requests relating to:
    • subdivision, split or consolidation;
    • renewal or exchange of securities; and
    • issuance of duplicate securities due to loss, destruction or old/worn certificates,

within 30 days of receipt of the request along with relevant documents

Effect: The regulation now directly recognises dematerialised credit as the end-point of investor service requests. SEBI has approved removal of the Letter of Confirmation (LOC) mechanism.

Compliance Impact:

  • Significant reduction in timelines for receipt of securities by eligible investors.
  • Lower operational risk for RTAs and listed entities as direct credit to demat account would also help update KYC of investors.

Important to note: The process of direct credit has not been notified by SEBI as on date. Hence, existing service request shall be processed in the manner prevailing as on the date until notified.

  • Registration of Transfer of Physical Securities – Amendment to Regulation 40 Regulatory change: Regulation 40(1) has been amended to provide that, notwithstanding the general requirement for dematerialisation, registration of transfer of securities executed before 1 April 2019 and held in physical form shall be permitted, subject to conditions specified by SEBI.

Effect: This amendment creates a statutory exception to the otherwise mandatory dematerialisation regime, limited to:

  • transfers executed prior to 1 April 2019; and
  • cases where securities continue to be held in physical form
  • SEBI has notified a circular dated January 30th, 2026 providing that special window for this purpose shall start from February 05th 2026 to February 04th, 2027.  A detailed newsletter shall follow.

For clarity with regard to applicability of this proposal, below matrix may be referred to:

Execution Date of Transfer DeedLodged before 01-04-2019?Original Share Certificate Available?Allowed in the proposed window?
Before 01-04-2019No (it is fresh lodgement)Yes✔
Before 01-04-2019Yes (it was rejected/ returned earlier)Yes✔
Before 01-04-2019YesNo✘
Before 01-04-2019NoNo✘

3. Transfer of Unclaimed Amounts Relating to Listed Debt Securities:

  • Amendment to Regulation 61A(3): Regulatory change – Regulation 61A(3) has been substituted to provide a unified framework for the transfer of unclaimed and unpaid amounts lying in escrow accounts:
    • Companies: Transfer to IEPF under section 125 of the Companies Act, 2013.
    • Non-companies: Transfer to SEBI’s IPEF after seven years from the maturity date of the non-convertible securities.
  • Amounts transferred to SEBI’s IPEF shall not carry interest.

Compliance impact

  • Aligning timeline for transfer of unclaimed interest/ dividend/ redemption payment entities having listed non-convertible securities to the IEPF/ IPEF, as the case may be with Companies Act provisions.

Important to note: Post notification of this amendment, the amounts shall be transferred after seven years from the date of maturity to avoid multiple transfers. Amount unclaimed till date would now have to be transferred on completion of seven years from the date of maturity of security.

4. Re-structuring of the High Value Debt Listed Entity (HVDLE) Framework:

  • Revised Threshold for HVDLE Classification – Regulatory change – The outstanding listed non-convertible debt threshold for classification as an HVDLE has been increased from ₹1,000 crore to ₹5,000 crore, reflected across:
    • Regulation 15(1A); and
    • Regulation 62C(1).
Important to note: HVDLE status will be determined based on the value of principal outstanding as of the date of the notification of this amendment, removing the previous reference to March 31, 2025. The provisions of Chapter VA shall continue to apply till value of outstanding listed debt securities as on March 31 in a year, reduces and remains below the specified threshold for a period of 3 consecutive financial years.

In case of a HVDLE whose outstanding value as on March 31, 2026 reduces below threshold as specified above, i.e. 5,000 crore, and remains reduced for as on March 31, 2027, as on March 31, 2028 and as on March 31, 2029, then provisions of Chapter VA shall not apply from Financial year 2029-2030.

Compliance impact

  • Mid-sized bond issuers exit the HVDLE compliance net.
  • Encouragement to raise capital through listed debt without governance over-burden.

  • Governance and Board-Related Amendments for HVDLEs: The notified amendments substantially align HVDLE governance with equity-listed entities, with necessary adaptations for the debt context.

Key changes include:

  • Shareholder approval by special resolution required in respect of a non-executive director attaining the age of 75 years.
  • Exclusion of time taken for regulatory or statutory approvals while computing timelines for director appointment or approval.
  • Exemptions from shareholder approval for directors nominated by:
    • financial sector regulators,
    • courts or tribunals, or
    • debenture trustees under subscription agreements.

Additionally, vacancies in board committees are required to be filled within three months, and board recommendations to shareholders must now explicitly record the rationale.

  • Subsidiary-Related Rationalisation
    • The test for determining a material subsidiary has been amended by replacing “income” with “turnover”.
    • Transactions involving sale, disposal or lease of assets between wholly-owned subsidiaries of an HVDLE have been exempted from shareholder approval requirements.
  • Insolvency-Linked Relaxations For HVDLEs where a resolution plan has been approved under the Insolvency and Bankruptcy Code, 2016:
    • Vacancies in key managerial personnel must be filled within three months of such approval.
    • Pending such filling, the entity must have at least one full-time KMP managing day-to-day affairs.
  • Secretarial Audit Framework: Regulation 62M has been aligned with Regulation 24A, mandating secretarial audit for HVDLEs in the manner specified by SEBI. The amendment introduces a formal and structured appointment framework for secretarial auditors of exclusively debt-listed entities, while entities already subject to Regulation 24A remain unaffected. The requirement to submit secretarial compliance report henceforth as per regulation 62M(2) has been omitted.
Important to note:   HVDLE shall appoint a secretarial auditor as per regulation 24A of LODR at the upcoming Annual General meeting for a term as specified in the regulation 24A from the FY 2026-27.
  • Related Party Transactions – Harmonisation with Regulation 23: Regulation 62K has been substituted to require HVDLEs to comply with Regulation 23 (except sub-regulations (8) and (9)) in respect of related party transactions. Additional statutory carve-outs have been notified for:
    • payment of statutory dues, fees or charges to Central or State Governments; and
    • transactions between public sector companies and Government entities.

The requirement for debenture trustee oversight and debenture holder approval continues to apply.

Compliance impact:

  • Clear movement towards equity-style governance discipline in debt markets.
  • Reduced interpretational gaps between Chapters IV and V of LODR.
Important to note: All the provisions of regulation 23 except as specified above and including all the circulars notified by SEBI or exchanges with respect to regulation 23 shall apply to such HVDLE.

Where a HVDLE was a subsidiary of a listed company (Equity) to which regulation 23 was applicable and hence, its RPTs were approved at the subsidiary level and were not placed before the listed holding company. Pursuant to the revision in HVD thresholds, if the subsidiary is no longer an HVDLE. In this context, RPTs proposed to be entered into by the subsidiary after it ceases to be an HVDLE would not require prior approval of the Audit Committee of the listed holding company

5. Language-Based Changes and Omissions:

  • Substituted “year” with “financial year” regarding the meeting frequency of the Board and all mandatory committees.
  • Substituted “government companies” with “public sector companies” in the context of RPT exemptions.
  • Substituted “listed entity” with “HVDLE” in Regulation 62D(5) regarding filling director vacancies.
  • Inserted “consecutive” between “two meetings” in Reg 62D(6).
  • Inserted “shall” and “the” in Reg 15(1AA) to clarify that regulations “shall continue to apply”.

6. Provisions of LODR Not Applicable to HVDLEs:

According to the amended Regulation 62K and other specific omissions, the following provisions are explicitly not applicable to HVDLEs:

  • Regulation 23(8): Requirement to place existing material related party contracts or arrangements for shareholder approval in the first General Meeting.
  • Regulation 23(9): Requirement to submit half-yearly disclosures of related party transactions (RPTs) to stock exchanges and publish them on the entity’s website.
  • Regulation 62M(2): The requirement for HVDLEs to submit an annual Secretarial Compliance Report to stock exchanges has been omitted.
  • Regulation 62N(7): The mandatory requirement to replace a resigned or removed independent director within three months of the vacancy has been omitted.
  • Regulation 62Q(2)(b): The obligation to disclose details of all material RPTs as part of the periodic corporate governance compliance report has been omitted.
  • Certain RPT Approvals (Reg 62K(7)): Requirements for audit committee and shareholder approval for RPTs are not applicable to:
    • Transactions between two public sector companies.
    • Transactions involving the payment of statutory dues, fees, or charges to the Central or State Governments.
    • Transactions between a public sector company and the Central or State Governments.
  • Insolvency Period Governance: Corporate governance provisions in Regulation 62D and committee requirements (62F, 62G, 62H, 62I) are not applicable while an HVDLE is undergoing a corporate insolvency resolution process.

[1] https://egazette.gov.in/(S(aikxq4eqe4c4twzio5cgirft))/ViewPDF.aspx