Sebi issues framework for intermediaries to report demise of an investor

With the receipt of the death certificate, the KRA should update the KYC as “Block Permanently” and, without the death certificate, the KRA should input “On Hold”.

Market intermediaries, including stockbrokers, have been entrusted with the responsibility of updating the records on the demise of an investor.

The Securities and Exchange Board of India (Sebi), through a circular dated. October 3, has laid out a centralised mechanism for reporting the demise of an investor through KYC Registration Agencies (KRAs.)

When an intermediary is informed about the demise of an investor, by a joint account holder(s) or nominee(s) or legal representative or family member, the intermediary should obtain the death certificate along with the PAN from the notifier. Then it should verify the death certificate either through online resources such as the website of the issuing authority or through offline process of Original Seen and Verified (OSV).

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The circular added, “The intermediary shall treat the OSV of the death certificate accompanied with the PAN of deceased investor, received electronically along with the credentials of the notifier (including his / her PAN) and the validation report from an Investor Service Centre (ISC) of the Stock Exchange or Depository (MII) 3 , to be on par with its own OSV.”

Then the intermediary should record and retain self-certified copy of proof of identity, relationship with deceased and contact details of the notifier.

If the intermediary--after getting to know about the demise of an investor--is not able to access the death certificate, then it should inform related parties such as the notifier(s) or the nominee that the KYC status of the investor has been flagged as “On hold”. It should inform the latter to furnish the necessary death certificate.

After verifying the death certificate, the intermediary should notify the KRA to update its information and block all debit transactions in the account of the deceased investor.

In case the death certificate is yet to be received, the intermediary should submit a KYC modification request to the KRA with “information on death of investor received; confirmation awaited”.

The KRA, on receipt of the information, should also perform an independent validation of the information whenever feasible and alert other linked intermediaries about the update.

With the receipt of the death certificate, the KRA should update the KYC as “Block Permanently” and, without the death certificate, the KRA should input “On Hold”.