Sebi Simplifies Process for Obtaining Copies of Lost Share Certificates
To streamline the process for investors who have lost their securities certificates, the Securities and Exchange Board of India (Sebi) is proposing significant changes aimed at simplifying the issuance of duplicate securities. The new measures include a uniform set of forms and an increase in the upper limit for issuing securities without a police report or newspaper advertisement to ₹10 lakh. Additionally, Sebi plans to eliminate the need for separate affidavits and indemnity bonds, replacing them with a single affidavit-cum-indemnity bond.
Proposed Changes to Duplicate Securities Issuance
Sebi’s proposed circular outlines a new approach to issuing duplicate securities, which currently involves a cumbersome three-step process. Investors must first submit a copy of a police report, including an e-FIR or court injunction, detailing the lost securities. They are also required to publish a newspaper advertisement announcing the loss. Finally, investors must submit both an affidavit and an indemnity bond on non-judicial stamp paper, following a specific format set by Sebi.
Under the new proposal, if the total value of the lost securities does not exceed ₹5 lakh, investors will no longer need to complete the first two steps. This change aims to reduce the burden on investors, who often face challenges due to the lack of standardization in documentation required by different registrar and transfer agents (RTAs) or listed companies.
Feedback from Investors and Stakeholders
Sebi has received feedback from investors and other stakeholders regarding the need to simplify the current rules. The existing threshold of ₹5 lakh for simplified documentation was established several years ago and does not reflect the current market conditions. Since then, the Indian securities market has experienced significant growth in market capitalization, investor participation, and average portfolio sizes.
As a result, the value of individual security holdings has increased considerably. Sebi acknowledges that the outdated ₹5 lakh limit imposes unnecessary procedural burdens on investors, making it more difficult for them to recover their lost securities. The proposed changes aim to address these concerns and make the process more efficient and accessible.
Standardization of Documentation
One of the key issues highlighted by Sebi is the non-standardization of documents required for the issuance of duplicate securities. Investors often face varying documentation requirements from different RTAs and listed companies, which can lead to confusion and delays. The proposed uniform set of forms is designed to alleviate these issues, ensuring that all investors follow the same streamlined process regardless of the company involved.
By adopting a single affidavit-cum-indemnity bond, Sebi aims to simplify the application process further. This approach has already been implemented by the Investor Education and Protection Fund Authority, which manages unclaimed stocks and mutual funds. The goal is to create a more user-friendly experience for investors seeking to recover their lost securities.
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