The Securities and Exchange Board of India (SEBI) has cleared a comprehensive proposal for overhauling the framework governing transmission of securities after an investor's death, aimed at significantly reducing compliance burden and enhancing ease of investing. According to The Times of India, the regulator noted that bereaved families often encounter complex documentation requirements and inconsistent practices across intermediaries, which can delay asset transfer. The policy change is designed to reduce procedural hurdles faced by legal heirs while claiming securities, with 21-day timeline set for processing transmission requests after receipt of all required documents. This move is expected to significantly reduce compliance burden in cases involving small investments and allow quicker settlement of claims.
SEBI has substantially increased the monetary thresholds for simplified documentation procedures, recognizing that current limits have become inadequate due to growth in India's securities markets and rising asset prices. As reported by The Times of India, the new limits are ₹10 lakh for physical securities and ₹30 lakh for dematerialised securities, compared to the previous thresholds of ₹5 lakh per listed entity for physical holdings and ₹15 lakh per beneficial owner for dematerialised holdings. Mutual fund units held in statement of account (SOA) form will be treated at par with physical securities for these purposes, enabling a larger number of investor families to benefit from simplified documentation procedures. The key tweak is that raising the thresholds will help a larger number of investors' families to benefit from simplified documentation procedures.
SEBI has introduced a new straight-through processing (STP) category for very small holdings where documentation costs could exceed the value of securities. According to The Times of India, claims up to ₹10,000 per listed entity or mutual fund (for physical or SOA holdings) and ₹30,000 per beneficial owner for dematerialised securities will be eligible for STP with minimal documentation. For claims above STP thresholds but within simplified documentation limits, additional documents such as notarised indemnity bond and no-objection certificate from other legal heirs or family settlement deed will be required. The big relief is that probated will requirement has been removed for claims above simplified documentation threshold, with claimants now able to provide succession certificate, letter of administration, court decree, or copy of will along with notarised indemnity bond. This feature is expected to significantly reduce compliance burden in cases involving small investments.
SEBI has decided to standardise documentation requirements across all intermediaries including listed companies, registrars and transfer agents (RTAs), depositories, depository participants (DPs) and asset management companies. As reported by The Times of India, entities will be required to provide standardised claim forms, publish documentation requirements on their websites and acknowledge receipt of claims. Claimants must be informed of any missing documents at the time of submission, while intermediaries may offer online facilities for submitting claims and tracking their status. For cases with no nomination or will, SEBI has adopted a risk-based approach with different documentation requirements depending on claim value, ensuring securities are transferred to rightful heirs while protecting intermediaries from legal disputes. The standardised procedure for submission and processing of claims will align the framework with practices followed by the Reserve Bank of India for settlement of similar claims.
When the deceased investor had registered a nomination, the process remains relatively straightforward. According to The Times of India, the nominee would need to submit a transmission request form, latest client master list (CML) of the demat account, verifiable death certificate, and officially valid identity proof. For claims eligible for straight-through processing, claimants would only need to submit a signed transmission request form, client master list, verifiable death certificate, officially valid identity proof and a simple undertaking. This streamlined approach ensures quicker settlement of claims for nominated beneficiaries while maintaining proper documentation standards.
