SEBI Eases Norms For Issue Of Duplicate Securities; Raises Limit To Rs 10 Lakh

In a bid to ease investor compliance and remove inconsistencies, Sebi on Wednesday doubled the monetary threshold for simplified documentation process for issuance of duplicate securities to Rs 10 lakh from Rs 5 lakh.

The regulator has simplified the procedure for issuance of duplicate securities certificates to make the process faster, more efficient and investor-friendly.

As part of the overhaul, Sebi said investors holding securities valued up to Rs 10 lakh will now be required to submit fewer documents, according to its circular.

It has also prescribed a standardised Affidavit-cum-Indemnity Bond format and rationalised documentation for securities valued above Rs 10 lakh.

To further reduce the compliance burden, notarisation of the Affidavit-cum-Indemnity Bond will no longer be required in cases where the value of securities is up to Rs 10,000.

These measures are aimed at helping investors recover lost or damaged securities with greater ease, while also promoting dematerialisation, as all duplicate securities will be issued only in demat form.

Accordingly, all listed companies and RTAs (registrar and transfer agents) have been directed to process requests strictly in line with the revised procedure.

The new rules come into effect immediately and will also apply to applications currently under process. However, Sebi clarified that investors who have already submitted documents under the old framework will not be required to resubmit them in the new formats.

Under the revised norms, investors with holdings of up to Rs 10 lakh will only need to submit the standard Affidavit-cum-Indemnity Bond on appropriate non-judicial stamp paper, while those with securities valued up to Rs 10,000 can submit a simple undertaking on plain paper.

For holdings exceeding Rs 10 lakh, investors will additionally have to provide a copy of the FIR, police complaint, court order or plaint containing full details of the securities. In such cases, the listed company will also publish a weekly newspaper advertisement about the loss of securities and may levy a minimal fee.

The timeline for processing such requests will begin from the date of receipt of complete documents from the investor or the date of newspaper publication by the company, whichever is later.

The move follows a consultation paper issued by Sebi in November, in which it had flagged that the absence of standardised documentation and varied practices among RTAs and listed companies were forcing investors to submit multiple sets of documents.

It had also noted that the earlier Rs 5 lakh threshold no longer reflected the growth in market size and average portfolio values.