Summary of this article
SEBI introduced quick transmission processing for small value claims
Simplified documentation monetary limits doubled for heirs of investors
Mandatory PAN submission and probate of will are eliminated
The Securities and Exchange Board of India (Sebi) announced several changes to its existing regulatory norms to enhance market efficiency and increase convenience for market investors. Among the various policy updates, one of the key changes announced is related to easing the share transmission framework.
Share transmission refers to the process by which the ownership of securities is transferred from a deceased investor to their lawful heirs or legal claimants. Here’s a look at how the changes in the regulations
Sebi’s Reforms To Share Transmission Framework
Sebi has introduced several reforms post its board meeting, such as the Quick Transmission Processing, enhanced monetary limits for simplified documentation, and elimination of the PAN submission requirement.
These changes have been made to reduce procedural bottlenecks and decrease administrative redundancies, which have historically plagued the transmission process. By standardising these rules, the regulator aims to improve overall operational efficiency for intermediaries while reducing distress experienced by claimants during the transmission process for securities.
Sebi has introduced the Quick Transmission Processing mechanism, which deals with small value claims of up to Rs 10,000 for physical shares and up to Rs 30,000 for dematerialised accounts.
“A new category of Quick Transmission Processing (QTP) for small-value claims(i.e. up to Rs 10 thousand for physical holdings and up to Rs 30 thousand for dematerialised holdings) has been introduced to facilitate efficient processing of such claims with minimal documentation,” Sebi said.
The new mechanism is expected to provide investors with a fast-track clearing process that requires minimal paperwork, meaning small claimants can access inherited funds almost immediately without facing prohibitive administrative costs.
As a part of the reforms, the regulator has also doubled the monetary thresholds allowed for simplified documentation to Rs 10 lakh per listed company for physical certificates and Rs 30 lakh per beneficiary for dematerialised assets. The reform is expected to aid mid-sized estate claimants, who will be able to avoid rigorous verification procedures and can secure their inherited wealth through a simpler application process.
“Further, limits for simplified documentation have been doubled from Rs 5 lakh to Rs 10 lakh for physical holdings per listed company and from Rs 15 lakh to Rs 30 lakh for dematerialised holdings per beneficial owner,” Sebi said.
Sebi has also removed the need to submit a PAN number since it is already linked to the existing dematerialised accounts. Additionally, the mandatory Probate of Will requirement has also been removed to match modern succession laws.
Claimants can now use a single combined affidavit cum no objection certificate (NOC) instead of separate forms, and they can submit death certificates featuring scannable quick response codes.
Sebi has also mentioned that for death certificates issued in foreign jurisdictions, additional modes for verification from overseas branches of Indian banks or any foreign bank with whom Indian banks have a correspondent banking relationship have been specified.
The collective impact of these updates can lead to a reduction in legal fees, fewer visits to government offices, and the elimination of repetitive paperwork processes for claimants.
Historically, the asset transmission process has been associated with a lot of due diligence to ensure the right beneficiaries receive the securities. However, after consultation with industry stakeholders, Sebi has sought to ease operational difficulties in the asset transmission process.
These changes are expected to help investors in undertaking estate planning with less hassle, as investors can be assured that their accumulated wealth will be transferred to their chosen heirs.
