Standardization of Documents for the Transmission of Securities and Simplification of Procedures

Procedure and Normalization of Formats of Documents Required for Handover of Securities

SEBI (Securities and Exchange Board of India) has released a detailed notification, announcing crucial changes, including simplification of the procedure for transmission of securities.

The Board has also standardized the formats of documents required for transmission of securities in order to further simplify the process for the Registrars to an Issue and Share Transfer Agents (“RTAs”). Here’s a brief overview of everything that the SEBI Circular contains.

Upon carefully reviewing the process for transmission of securities being followed at present by the Registrar and Share Transfer Agent country-wide, SEBI found scope for improvements and has thus proposed the following modifications as an ongoing measure to make the transmission process simpler and more efficient for everyone involved.

The changes thus were made under the Securities and Exchange Board of India Regulations, 2022 (“LODR Amendment Regulations”) vide Notification no. SEBI/LAD-NRO/GN/2022/80 dated April 25th, 2022).

Among other things, the new regulations will include an increase in the monetary limits for streamlined documentation for the purpose of transmission of shares. In addition, it now accepts ‘Legal Heirship Certificate or equivalent certificate as a valid document for securities transmission and has also clarified doubts pertaining to the acceptability of a Will as a valid document for this purpose.

  • Through the SEBI Circular SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2022/65 dated May 18, 2022, the institute intends to specify the valid formats of various documents as required in the process of transmission of securities. (The same are available in the PDF attached with this article.)

To make the process further easier, especially in the case when the sole holder is deceased, the Circular also lists out in Annexure – A all the documents required for securities transfer. Annexure – B, on the other hand, contains detailed guidelines on the process of making a service request by the investor for the transmission of securities. Annexure – C contains the format of the form that a nominee or legal heir needs to be filed while requesting transmission of shares in their name.

As per the format of annexure D, the notarized affidavit in the circular by all the legal heirs on the non-judicial stamp paper as per decided value for the identification and the securities legal ownership.

Whenever a copy of a Will is submitted as required by the Indian Succession Act of 1925 (39 of 1925), it must be accompanied by the notarized indemnity bond signed by the claimant (appropriate beneficiary of the Will) to whom the securities are transferred, in accordance with the format in Annexure E of this Circular.

Providing notarized proof of relinquishment of rights from all non-claimants (remaining legal heirs), in the format provided in Annexure – F to this circular, that they have relinquished all rights to the claim for transmission of securities.

As soon as the documents submitted for the transmission of securities were verified and processed, if the deceased holder held the securities in one name and in physical mode, the RTAs/ Issuer companies will inform the claimant(s) about the execution of the request within 30 days of receipt, by issuing a Letter of Confirmation in accordance with Annexure – G of this Circular.

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