Promoter encumbrance disclosure
The disclosure a promoter makes on creating, invoking or releasing an encumbrance over shares of the target company.
Disclosure of an encumbrance event
Counted from creation, invocation or release of an encumbrance over shares of the target company
- SEBI
- Insider trading and takeovers
- Not specified
- 2026-09-01
Seven working days from the event. SAST Reg 31(1) and 31(2) require a promoter of a target company, together with persons acting in concert, to disclose the creation, invocation or release of an encumbrance over shares of the target. Reg 31(3) sets the seven-working-day period and requires the disclosure to go to every stock exchange where the target's shares are listed and to the target company. The requirement does not apply where the encumbrance is undertaken in a depository.
Deadlines counted from an event
Within seven working days of the creation, invocation or release of the encumbrance, disclose it in the prescribed form to every stock exchange where the target's shares are listed and to the target company. Reg 31(3) sets the period. The requirement does not apply where the encumbrance is undertaken in a depository.
The rule
Within seven working days of the creation, invocation or release of the encumbrance, disclose it in the prescribed form to every stock exchange where the target's shares are listed and to the target company. Reg 31(3) sets the period. The requirement does not apply where the encumbrance is undertaken in a depository.
Who must comply
- A promoter of a target company, together with persons acting in concert
- Anyone whose arrangement over the target's shares is an encumbrance within Reg 28(3), including a negative lien or a non-disposal undertaking
- The disclosure requirement does not apply where the encumbrance is undertaken in a depository
Statutory basis
- SAST Reg 31(1) and 31(2), disclosure of creation, invocation and release of an encumbrance, and Reg 31(3), seven working days
- SAST Reg 28(3), definition of encumbrance, including a negative lien, a non-disposal undertaking and any arrangement in the nature of an encumbrance
- SAST Regulations, 2011, consolidated text as amended to 5 December 2025 (PDF)
- Master Circular for Substantial Acquisition of Shares and Takeovers
Before you file
- Identify whether the arrangement is an encumbrance within Reg 28(3).
- Check whether the encumbrance was undertaken in a depository, which removes the requirement.
- Get the documents that record the creation, invocation or release.
- Get the current disclosure format from the SAST master circular.
How to file
- Record the date of the creation, invocation or release.
- Complete the prescribed disclosure form.
- Send it to every stock exchange where the target's shares are listed.
- Send it to the target company.
- Do this within seven working days of the event.
- Check whether the same event also needs a Reg 29(2) disclosure.
If you miss it
Section 15A(b) of the SEBI Act is the head for a late or missing encumbrance disclosure, at ₹1 lakh for each day the failure continues, capped at ₹1 crore. Section 15HB is available at up to ₹1 crore where no specific head fits.
- Encumbered promoter holdings feed the exchanges' own surveillance measures, and both NSE and BSE publish measures for companies with high promoter and non-promoter encumbrance under Reg 28(3)
- An encumbrance taken or released also moves the Reg 29 numbers, because Reg 29(4) treats it as an acquisition or a disposal
Common questions
How long is the encumbrance disclosure window?
Seven working days from the creation, invocation or release, under Reg 31(3). Working days, not calendar days.
What counts as an encumbrance?
More than a pledge. Reg 28(3) covers a negative lien, a non-disposal undertaking and any covenant, transaction, condition or arrangement in the nature of an encumbrance, whether or not it is recorded formally.
Is there an exception?
Yes, a standing one. The requirement does not apply where the encumbrance is undertaken in a depository.