SEBI has simplified the process for transferring securities after a death, raising thresholds for easier documentation. The new rules allow for faster processing of claims up to ₹30 lakh in demat accounts, reducing paperwork for investors and families.
Detailed Coverage
The Securities and Exchange Board of India (SEBI) has introduced a simplified framework for the transmission of securities, which refers to the process of transferring ownership of shares, bonds, or mutual funds following the death of a holder. By streamlining documentation and setting clearer timelines, the regulator aims to reduce the legal and administrative hurdles that families often face when claiming inherited investments.
Updated Thresholds and Quick Processing
Under the new guidelines, the regulator has introduced a Quick Transmission Processing (QTP) mechanism. This applies to smaller claims, specifically physical holdings valued up to ₹10,000 and demat holdings up to ₹30,000. For these smaller amounts, the documentation required is significantly reduced to speed up the transfer.
For larger estates, the threshold for using simplified documentation has been increased to ₹10 lakh for physical securities and ₹30 lakh for demat holdings. This change is particularly significant for retail investors, as it covers a larger portion of portfolios that previously required more complex legal documentation, such as the probate of a will. SEBI has officially removed the requirement for mandatory probate of a will to align with current succession practices, which should lower costs and save time for claimants.
Digital and Standardized Procedures
To ensure consistency across the market, SEBI now requires listed companies, asset management companies (AMCs), and registrars and transfer agents (RTAs) to use standardized forms for all transmission requests.
The documentation process has also been modernized. A single consolidated affidavit-cum-NOC replaces the need for multiple separate documents. Furthermore, the regulator now accepts QR code-enabled death certificates for verification. For death certificates issued outside India, verification can now be conducted through overseas branches of Indian banks or foreign banks that have correspondent relationships with Indian financial institutions.
Timelines and Accountability
Recognizing that delays can be a major pain point for families, SEBI has mandated a processing timeline of 21 calendar days from the moment all required documents are submitted. Entities responsible for processing these requests—such as depositories and RTAs—are now required to provide online facilities for submitting and tracking the status of claims. If a request is rejected or delayed beyond the 21-day period, the entity must provide a written explanation to the claimant.
The new regulations will formally take effect 30 days from the date of the circular. Investors should monitor how quickly RTAs and depositories update their online portals to offer these tracking facilities, as this will be the primary indicator of improved service efficiency for claimants in the coming months.