SEBI Proposes Simplified Claim Process For Heirs Of Deceased Investors

The Securities Exchange Board of India (SEBI) proposed the simplification of the documentation procedure involved in the transmission of securities due to the death of an investor to make it easier for the nominees or legal heirs to claim the financial assets. This proposal was included in the consultation paper released on March 13.

According to SEBI, the existing documentation limits require revision due to the rapid expansion of India’s securities market and rising asset values. The regulator said updating the limits could help reduce procedural hurdles and speed up the return of assets to survivors.

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Revised Thresholds For Claims

Under the proposed framework, SEBI has suggested new thresholds for simplified documentation depending on whether securities are held in physical or dematerialised form.

The regulator proposed an STP limit of ₹10,000 for physical securities and ₹30,000 for demat securities. These claims would require minimal documentation because processing costs could otherwise exceed the value of the securities.

For simplified documentation cases, the proposed limits are ₹10 lakh for physical securities and ₹30 lakh for demat holdings. Listed entities may increase the ₹10 lakh threshold for physical securities at their discretion, according to the consultation paper.

SEBI said these changes aim to reflect the growth of the capital market and higher investment values.

Documentation Requirements For Nominees And Heirs

Where a nomination exists, the proposed process requires submission of a transmission request form, the latest client master list (CML) of the demat account attested by the depository participant, a verifiable death certificate and valid identification documents.

The regulator stated that a verifiable death certificate could include the original document, a copy verified by the nominee, a notarised copy, or a certificate containing a QR code.

A Legal Heirship Certificate, as may be required, should be issued by a Revenue Officer not below the rank of a Tehsildar. 

In the absence of a nomination and a will, a risk-based approach for documentation has been suggested by SEBI based on the claim value. 

Processing Timeline And Claim Tracking

For low-value claims falling within the limits of the STP process, claimants will have to submit a transmission request form, the latest CML, a verifiable death certificate, identification proof, and an undertaking.

Claims above the simplified documentation threshold would require stronger legal documentation, including succession certificates, letters of administration, court decrees, or copies of wills supported by notarised indemnity bonds.

SEBI has also proposed standardising claim submission procedures. Entities would need to provide standard forms, make them available both online and offline, acknowledge claim submissions, and notify applicants about missing documents.

Transmission requests should be processed within 21 calendar days from the date when all required documents are submitted. Any delay or rejection must be communicated to the claimant along with the reasons.
The regulator has invited public comments on the proposed changes until April 2, according to the consultation paper.