Simpler claim process for heirs of deceased investors

Mumbai: Securities and Exchange Board of India (SEBI) has proposed simplifying the documentation process for transmission of securities after the death of an investor to make it easier for nominees and legal heirs to claim financial assets.

In a consultation paper released on Thursday, the regulator suggested revising monetary thresholds for simplified documentation and introducing a straight-through processing (STP) mechanism for small-value claims to reduce paperwork and speed up settlements.

SEBI said the current limits for simplified documentation were fixed years ago and need revision in view of the rapid growth of the securities market and rising asset values.

Under the proposal, the STP limit will be`10,000 for physical securities and`30,000 for demat holdings. The threshold for simplified documentation will be raised to`10 lakh for physical securities and`30 lakh for demat holdings. Listed entities may further enhance the`10 lakh limit for physical holdings.

For cases where a nomination exists, the nominee will need to submit a transmission request form, the latest client master list (CML) of the demat account, a verifiable death certificate and valid identity proof. In cases without a nomination or will, SEBI has suggested a risk-based documentation approach depending on the claim value. Low-value claims under STP will require minimal documents, while higher-value claims will require additional paperwork such as indemnity bonds, no-objection certificates from other heirs or legal documents such as a succession certificate or court decree.

SEBI has also proposed standardised claim submission procedures and a 21-day timeline for processing transmission requests after receiving complete documents. The regulator has invited public comments on the proposals until April 2.