SEBI Unlocks Investor Ease: New Framework Simplifies Securities Transmission, Introduces Quick Track for Low-Value Claims

SEBI Unlocks Investor Ease: New Framework Simplifies Securities Transmission, Introduces Quick Track for Low-Value Claims​

Securities and Exchange Board of India (SEBI) has introduced a sweeping overhaul of the framework governing the transmission of securities following the demise of a sole or joint security holder. The circular aims to significantly enhance investor convenience and streamline processes across all processing entities, including Listed Companies, RTAs, Depositories, and AMCs.

The new regulations standardize the process for handling inheritance claims, moving towards a more efficient and risk-based system designed to protect investor interests in the securities market. These changes are intended to improve both the ease of doing business and the ease of investment within India’s financial markets.

Streamlining Death Claim Procedures​

SEBI has introduced several key features aimed at making the transmission process less cumbersome for claimants. A major simplification is the removal of the mandatory requirement of Probate of Will, aligning with recent amendments to succession laws.

Furthermore, the regulatory changes accommodate modern documentation practices by accepting a copy of the death certificate bearing a QR Code as an eligible document, provided proper verification protocols are met. For foreign jurisdictions, SEBI has also permitted additional verification methods involving correspondent banking relationships abroad.

Introduction of Quick Transmission Processing (QTP)​

A standout feature of the revised framework is the introduction of 'Quick Transmission Processing' (QTP). This new category caters specifically to small investors with low-value claims, drastically simplifying the documentation requirements for immediate relatives.

The threshold limits for QTP and simplified documentation have been carefully defined based on both physical and dematerialised holdings. As per the regulations, the thresholds are:

• Securities in Physical Mode: The limit is set at ₹10 Thousand (QTP) or ₹10 Lakhs (Simplified Documentation).
• Securities in Dematerialised Mode: The QTP limit is ₹30 Thousand, while the simplified documentation threshold remains ₹30 Lakhs.

These thresholds ensure that investors with lower-value claims can access a streamlined process, provided they are immediate relatives of the deceased security holder.

Standardizing Documentation Requirements​

The circular mandates standardisation across all related processes for transmission, including changes to affidavit and NOC requirements. The new rules specify combined use of an Affidavit-cum-No Objection Certificate (NOC) form, reducing the need for separate documents.

For claims submitted under the Simplified documentation category, claimants must submit a notarised affidavit-cum-NOC from all legal heirs, alongside specific indemnity bonds if required. This layered approach ensures that complex transmission processes are categorized and handled appropriately based on claim value.

Global Investor Support and Timeframes​

The guidelines also provided robust support for investors who pass away outside of India. In such cases, 'proof of death' can be certified through various international channels to meet regulatory standards.

A critical element established by SEBI is the mandatory settlement timeline. Processing entities are required to complete the transmission case within a period not exceeding 21 calendar days from the date of receipt of all necessary documents. Failure to adhere to these timelines allows SEBI to undertake appropriate action against the processing entity.