SEBI proposes simplified claim process, higher limits to ease transmission of securities

SEBI proposes simplified claim process, higher limits to ease transmission of securities

• SEBI proposes simpler process for securities transmission
• Thresholds for simplified documentation raised for larger claims
• Standardised procedures and 21-day timeline for claim processing

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Capital market regulator, Securities and Exchange Board of India (SEBI), has proposed a comprehensive overhaul of the framework governing the transmission of securities after the death of an investor, aiming to simplify documentation requirements, raise thresholds for simplified procedures and introduce straight-through processing for low-value claims.

In a consultation paper issued on Thursday, the regulator said the proposed changes are intended to enhance ‘ease of investing’ by reducing procedural hurdles faced by legal heirs while claiming securities. SEBI noted that bereaved families often encounter complex documentation requirements and inconsistent practices across intermediaries, which can delay the transfer of assets.

Higher thresholds for simplified documentation

A key proposal is the revision of monetary thresholds for simplified documentation, which SEBI said have become inadequate due to the growth of India’s securities markets and rising asset prices.

Currently, simplified documentation is allowed for transmission of securities up to Rs 5 lakh per listed entity for physical holdings and Rs 15 lakh per beneficial owner for dematerialised holdings. SEBI has proposed increasing these limits to Rs 10 lakh for physical securities and Rs 30 lakh for dematerialised securities.

Mutual fund units held in statement of account (SOA) form would be treated at par with physical securities for this purpose. SEBI said raising the thresholds would enable a larger number of investors’ families to benefit from simplified documentation procedures.

Minimum documentation for small claims

The regulator has also proposed creating a new straight-through processing (STP) category for very small holdings where the cost and effort of documentation could exceed the value of the securities.

Under this framework, claims up to Rs 10,000 per listed entity or mutual fund (for physical or SOA holdings) and Rs 30,000 per beneficial owner for dematerialised securities would be eligible for straight-through processing with minimal documentation. This is expected to significantly reduce the compliance burden in cases involving small investments and allow quicker settlement of claims.

Standardisation of documentation requirements

The consultation paper also seeks to standardise documentation requirements across intermediaries including listed companies, registrars and transfer agents (RTAs), depositories, depository participants (DPs) and asset management companies.

According to SEBI, investors and intermediaries have reported divergent practices being followed while processing transmission requests, creating uncertainty for claimants.

The regulator therefore proposed a uniform documentation framework based on the nature and value of the claim.

Cases where nomination exists

Where the deceased investor had registered a nomination, SEBI said the process would remain relatively straightforward. In such cases, 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.

Cases without nomination or will

Transmission becomes more complex when there is no nomination or will, as intermediaries must ensure that the securities are transferred to the rightful heirs while protecting themselves from potential legal disputes. To address this, SEBI proposed a risk-based approach with different documentation requirements depending on the value of the claim.

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.

For claims above the STP threshold but within the simplified documentation limits, additional documents such as a notarised indemnity bond and no-objection certificate (NOC) from other legal heirs or a family settlement deed would be required.

Removal of mandatory probated will requirement

For cases above the simplified documentation threshold, SEBI has proposed removing the requirement of submitting a probated will. The proposal follows recent amendments to the Indian Succession Act, 1925 which abolished mandatory probate requirements for certain communities in Mumbai, Chennai and Kolkata from December 2025.

Instead, claimants may provide a succession certificate, letter of administration, court decree, or copy of a will along with a notarised indemnity bond. Alternatively, a legal heirship certificate along with indemnity and NOCs from non-claimants could also be submitted.

Clear procedures and timelines

To further streamline the process, SEBI proposed standardised procedures for submission and processing of claims. Entities would be required to provide standardised claim forms, publish documentation requirements on their websites and acknowledge receipt of claims. Claimants must also be informed of any missing documents at the time of submission. Intermediaries may additionally offer online facilities for submitting claims and tracking their status.

SEBI has also proposed a 21-day timeline for processing transmission requests after receipt of all required documents. If claims are delayed or rejected, the entity must provide written reasons.

The regulator also proposed expanding the modes through which proof of death issued outside India can be certified. In addition to certification by courts, notaries, Indian embassies or apostille authorities, the regulator suggested allowing certification by authorised officials of overseas branches of Indian scheduled commercial banks or foreign banks.

SEBI said this would align the framework with practices followed by the Reserve Bank of India for settlement of similar claims.

SEBI said the proposed norms will reduce delays and legal costs and other expenses associated with asset transmission. SEBI has invited public comments on the proposals until April 2, 2026.