SEBI simplifies issuance of duplicate shares, raises threshold to Rs 10 lakh for easier issuance

SEBI

Market regulator Securities and Exchange Board of India (SEBI) has further simplified the procedure for issuance of duplicate securities certificates to enhance ease of investing and protect investor rights. In a circular issued on Wednesday, SEBI increased the threshold for simplified documentation from Rs 5 lakh to Rs 10 lakh and standardised key documents required for such requests.

Under the revised framework, investors holding securities valued up to Rs 10 lakh will now be required to submit a standardised Affidavit-cum-Indemnity bond, while those with securities up to Rs 10,000 can furnish a simple undertaking on plain paper, with notarisation done away entirely for such small-value cases.

For securities exceeding Rs 10 lakh, additional safeguards such as FIRs or court-related documents will continue to apply, along with mandatory newspaper advertisements by listed companies

SEBI had issued a draft circular on the issue and justified the rationale, SEBI paper stated, “Executing two different forms and paying separate stamp duty results in duplication of effort and financial inconvenience for the investors. In many cases, the value of securities may be less than the value of stamp duty. In such cases, payment of stamp duty on two different instruments may not be logical”.

SEBI had also formalised the industry practice of advertising about the loss of shares into the circular. Circular said, that listed companies will issue newspaper advertisements on behalf of investors, formalising existing market practice but may charge a minimal fee towards such advertisement.

The revised norms have come into force with immediate effect and will also apply to pending requests, without requiring resubmission of documents already provided.

SEBI circular stated, "The revised provisions shall also be made applicable to ongoing requests for issuance of duplicate securities which are under process to give benefit of the simplified procedure to the investors. However, if certain documents have already been submitted by the investor, listed companies/RTAs shall not insist on re-submission of such documents in the new formats".

SEBI said the measures aim to make the process more efficient and investor-friendly, while also encouraging dematerialisation, as duplicate securities will be issued only in demat form.

Investment advisers note that regulatory complexities have led to the emergence of a parallel service ecosystem, where investors are charged steep fees to facilitate such processes. In many cases, the charges exceed the value of the securities involved, making it uneconomical for investors, who often choose to abandon their claims.