Sebi plans major easing of process for reissuing lost securities

SEBI is also planning to eliminate the dual requirement of submitting both an affidavit and an indemnity bond

India’s market regulator is looking to ease the cumbersome process of reissuing lost or misplaced securities—including shares, bonds and mutual fund units—by introducing uniform paperwork across registrars and transfer agents (RTAs) and listed companies.

As part of the proposed overhaul, SEBI has recommended doubling the upper limit for issuing duplicate securities without the need for an FIR or a newspaper advertisement, raising it from Rs 5 lakh to Rs 10 lakh.

In a significant procedural shift, SEBI is also planning to eliminate the dual requirement of submitting both an affidavit and an indemnity bond. Instead, investors may soon be required to file a single, combined affidavit-cum-indemnity bond, a move aimed at cutting down on administrative delays and reducing documentation hurdles.

Currently, investors must comply with a three-step process: file an FIR detailing the loss of securities, publish a newspaper advertisement, and submit both an affidavit and indemnity bond in a Sebi-prescribed format. The system often causes confusion and lengthy delays, largely because RTAs and listed companies follow differing documentation standards, forcing investors to repeatedly obtain verified papers for multiple issuers.

A similar streamlined process is already followed by the Investor Education & Protection Fund Authority under the finance ministry, which handles unclaimed shares, dividends and mutual funds before returning them to rightful owners.

According to Sebi’s draft circular, applications involving securities valued at up to Rs 5 lakh will no longer require an FIR or a newspaper advertisement. The regulator noted that non-standardised documentation and inconsistent practices among RTAs and companies have long been a pain point for investors—an issue the proposed reforms aim to resolve.