India’s capital markets regulator, Securities and Exchange Board of India (SEBI), has proposed a simplified process for the transmission of securities after the death of an investor. The initiative is aimed at reducing paperwork and making it easier for nominees and legal heirs to claim financial assets.
According to a consultation paper released by the regulator, the new framework seeks to streamline documentation requirements, revise monetary thresholds for simplified claims, and introduce a straight-through processing (STP) mechanism for small-value claims.
The regulator said the proposal is necessary given the significant expansion of India’s securities markets and rising asset values.
According to the consultation paper:
"The existing limits for simplified documentation were set in time and there is a dire need to review the current limits given the exponential growth of the securities market and increased asset prices," Securities and Exchange Board of India (SEBI) said, according to PTI.
The regulator further noted:
"To keep up with this and as a measure to ease restitution of assets to survivors of deceased investors, the limits for availing simplified documentation for transmission are proposed to be revised," it added.
Under the proposed framework, SEBI has suggested expanding the acceptable forms of death verification documents.
Original death certificate
A copy verified with the original by the nominee
A copy attested by a notary public or gazetted officer
A certificate carrying a QR code
These changes aim to make it easier for claimants to provide valid documentation and reduce delays in claim settlements.
The regulator has also specified requirements for legal heirship certificates under the proposed system.
According to SEBI’s proposal, a legal heirship certificate must be issued by a revenue authority not below the rank of a Tehsildar. This measure ensures the authenticity of documents while maintaining accessibility for claimants.
To reflect the rapid growth of India’s securities market and rising asset values, SEBI has suggested revising the monetary thresholds that determine which claims qualify for simplified documentation.
STP limit:
₹10,000 for physical securities
₹30,000 for demat securities
Simplified documentation threshold:
₹10 lakh for physical holdings
₹30 lakh for demat holdings
The regulator also noted that listed entities may enhance the ₹10 lakh threshold for physical securities at their discretion.
The revised limits aim to make the claim process more practical and aligned with current market valuations.
SEBI has proposed introducing a straight-through processing (STP) mechanism for very small claims where the cost of documentation could exceed the value of the securities.
Under the STP mechanism, claimants would only need to submit limited documentation, allowing intermediaries to process claims much faster.
Transmission request form
Latest client master list (CML)
Verifiable death certificate
Valid ID proof
An undertaking from the claimant
This approach is expected to significantly reduce administrative delays for small-value claims.
In cases where the deceased investor had registered a nominee, the claim process will be considerably simpler.
Nominees will need to submit:
Transmission request form
Latest client master list (CML) attested by the depository participant
Verifiable death certificate
Valid identification proof
According to SEBI, once intermediaries complete the settlement process, nominees can transfer the securities to legal heirs without attracting income tax.
In situations where an investor did not nominate anyone or leave a will, the process becomes more complex.
In such cases, intermediaries must verify that the securities are transferred to the rightful heirs.
To address this, SEBI has proposed a risk-based documentation framework, where requirements vary depending on the claim value.
Claimants must submit:
Transmission request form
Latest CML
Verifiable death certificate
Valid ID proof
Undertaking
Additional documents required include:
Notarised indemnity bond
No-objection certificate (NOC) from other legal heirs
Family settlement deed
Stronger legal documentation will be required, including:
Transmission request form
Latest CML
Death certificate
ID proof
Notarised affidavit from all legal heirs confirming ownership
Additionally, claimants must provide one of the following:
Succession certificate
Letter of administration
Court decree
Copy of the will with notarised indemnity bond
Legal heirship certificate along with indemnity bond and NOCs from non-claimants
SEBI has also proposed standardising claim submission procedures across intermediaries and listed entities.
Provide standard claim forms
Offer both online and physical submission options
Acknowledge receipt of claims
Inform claimants promptly about missing documents
Provide facilities for online tracking of claims
Under the proposed rules, transmission cases must be processed within 21 calendar days after receiving all required documents.
If there is any delay or rejection, the entity must inform the claimant and provide reasons for the decision.
For cases involving investors who pass away outside India, SEBI has suggested additional ways to certify proof-of-death documents.
Accepted certification authorities may include:
Court magistrate or judge
Notary public
Indian embassy or consulate
Apostille certification
Additionally, the regulator has proposed accepting certification by authorised officials of overseas branches of scheduled commercial banks in India or foreign banks.
SEBI has invited feedback from market participants, investors, and stakeholders on the proposed framework.
Public comments on the consultation paper can be submitted until April 2.
SEBI’s proposal to simplify the transmission process for securities represents an important step toward improving investor protection and making financial asset claims easier for families of deceased investors. By revising monetary thresholds, introducing straight-through processing for small claims, and standardising documentation requirements, the regulator aims to significantly reduce paperwork and speed up settlement timelines.
As India’s securities market continues to expand rapidly and more individuals invest in equities and mutual funds, these reforms could play a crucial role in ensuring smoother asset transfer to nominees and legal heirs. If implemented, the new framework could enhance transparency, reduce legal complications, and provide much-needed relief to families navigating financial claims during difficult times.