SEBI Eases Norms for Duplicate Securities: Threshold Doubled to Rs 10 Lakh, Documentation Simplified - 5 Key Things to Know
The Securities and Exchange Board of India (SEBI) announced significant relaxations in the process for obtaining duplicate securities on Wednesday, doubling the monetary threshold for simplified documentation from Rs 5 lakh to Rs 10 lakh. The regulatory changes, which came into force immediately through a circular issued late Wednesday, aim to ease investor compliance burdens, remove procedural inconsistencies, and better reflect current market realities.
Background and Rationale
The move follows a consultation paper issued by SEBI in November 2024, which sought stakeholder feedback on streamlining the duplicate securities issuance process. The market regulator acknowledged that the previous Rs 5 lakh threshold had become outdated and no longer aligned with current market valuations, thereby imposing unnecessary procedural burdens on investors.
SEBI's decision recognizes that security values have appreciated significantly over time, making the old threshold increasingly restrictive and forcing more investors into the complex documentation category even for relatively modest holdings.
5 Key Things Investors Must Know
1. Doubled Threshold for Simplified Documentation
The most significant change is the increase in the monetary threshold for simplified documentation:
- Previous Threshold: Rs 5 lakh
- New Threshold: Rs 10 lakh
- Impact: Investors holding securities valued up to Rs 10 lakh will now be required to submit fewer documents when applying for duplicate certificates
- Beneficiaries: A substantially larger number of investors will qualify for the simplified process
This change means that investors whose lost, damaged, or stolen securities fall below the Rs 10 lakh mark can avoid the more cumbersome documentation requirements that apply to higher-value securities, making the recovery process significantly more convenient.
2. Notarization Waived for Securities Up to Rs 10,000
SEBI has introduced an additional layer of simplification for smaller-value securities:
- Threshold for Waiver: Securities valued up to Rs 10,000
- Benefit: Notarization of the Affidavit-cum-Indemnity Bond will no longer be required
- Cost Saving: Eliminates notarization fees, which can be significant relative to the security value
- Time Saving: Removes the need to visit a notary, streamlining the process
- Practical Logic: SEBI recognized that notarization costs could sometimes exceed the value of securities in question
This pragmatic approach acknowledges that requiring notarization for low-value securities created a disproportionate compliance burden, potentially discouraging investors from claiming their rightful assets.
3. Standardized Affidavit-cum-Indemnity Bond Format
SEBI has prescribed a standardized format for the Affidavit-cum-Indemnity Bond to ensure uniformity and clarity:
- Single Instrument: Combines affidavit and indemnity bond in one document
- Standardization: Uniform format across all listed companies and RTAs (Registrar and Transfer Agents)
- Simplified Process: Eliminates confusion about document requirements
- Rationalized Documentation: For securities valued above Rs 10 lakh, documentation requirements have been streamlined
The standardized format removes ambiguity and ensures investors know exactly what's required regardless of which company's securities they're claiming.
4. Strict Compliance Directive to Companies and RTAs
SEBI's circular contains a clear directive to market intermediaries:
- Mandatory Compliance: All listed companies and RTAs must process requests strictly according to the revised procedure
- No Discretion: Intermediaries cannot impose additional requirements beyond SEBI's prescribed norms
- Enforcement: Non-compliance may attract regulatory action
- Implementation Timeline: Changes effective immediately from the circular's issuance date
This directive ensures that the regulatory relief reaches investors on the ground and that companies cannot create additional hurdles beyond what SEBI has mandated.
5. No Resubmission Required for Pending Applications
SEBI has provided transition relief for investors with ongoing applications:
- Grandfathering Provision: Investors who submitted documents under the old framework need not resubmit them in new formats
- Continuity: Pending applications will be processed to completion under the rules they were submitted under
- No Additional Burden: Investors won't face the hassle of reformatting and resubmitting already-filed applications
- Processing Efficiency: Prevents backlog creation and expedites resolution of pending cases
This practical approach prevents creating additional work for investors who had already complied with previous requirements and avoids disrupting applications in process.
Previous Requirements Under Old Framework
To appreciate the significance of these changes, it's important to understand what the old process entailed. SEBI had prescribed documentary and procedural requirements for issuing duplicate share certificates through its June 23, 2025 master circular.
Old Requirements for Securities Valued Rs 5 Lakh or More
Under the previous rules, if securities' value was Rs 5 lakh or more, security holders were required to submit:
- FIR or Police Complaint: Copy of First Information Report (FIR), e-FIR, or police complaint documenting the loss or theft
- Court Injunction Order: Alternatively, a court injunction order
- Security Details: Complete details including:
- Folio number
- Distinctive number range
- Certificate numbers
- Public Advertisement: Advertisement of the loss in a widely circulated newspaper
- Separate Affidavit and Indemnity Bond: Two distinct documents on non-judicial stamp paper
- Stamp Duty: Payment of stamp duty on both instruments separately
Problems with the Old System
SEBI identified several issues with the previous framework:
- Illogical Costs: In many cases, the value of securities was less than the stamp duty required on the documents, making the process economically irrational
- Outdated Threshold: The Rs 5 lakh limit didn't reflect current market realities and security valuations
- Procedural Complexity: Multiple document requirements created confusion and delays
- Time-Consuming: Newspaper advertisements, police complaints, and notarization added significant time to the process
- Cost Burden: Multiple fees (stamp duty on two instruments, newspaper ads, notarization) could be substantial
Broader Objectives and Benefits
Ease of Investment
The revised norms aim to make investing in securities more user-friendly by ensuring that investors aren't deterred from claiming their legitimate holdings due to procedural complexity. This is particularly important for:
- Retail investors with modest holdings
- Senior citizens who may find complex procedures challenging
- Investors in smaller towns with limited access to notaries and legal assistance
- First-time investors unfamiliar with documentation requirements
Facilitating Restitution of Investor Rights
By simplifying the process, SEBI aims to ensure that investors can more easily reclaim their rights in securities that may have been lost, damaged, or stolen. This protection of investor rights is fundamental to maintaining confidence in the securities market.
Increased Dematerialization
SEBI noted that duplicate securities issued would necessarily be in demat (dematerialized) mode. This has multiple advantages:
- Enhanced Security: Electronic securities cannot be physically lost or stolen
- Easier Transfers: Electronic transfer is faster and more convenient
- Reduced Fraud: Dematerialization eliminates risks of fake certificates
- Lower Costs: Ongoing costs of maintaining physical certificates are eliminated
- Environmental Benefits: Paperless holdings reduce environmental impact
By making the duplicate issuance process easier and ensuring duplicates are issued in demat form, SEBI is indirectly encouraging the broader adoption of dematerialized holdings.
Practical Implications for Different Investor Categories
For Small Retail Investors (Securities up to Rs 10,000)
- Minimal documentation burden
- No notarization cost or hassle
- Quick turnaround time possible
- Cost-effective process relative to security value
For Mid-Size Holdings (Rs 10,000 to Rs 10 Lakh)
- Simplified documentation compared to previous Rs 5 lakh threshold
- Notarization still required but overall process streamlined
- Standardized affidavit-cum-indemnity bond format
- No newspaper advertisement requirement (if applicable)
For Large Holdings (Above Rs 10 Lakh)
- More comprehensive documentation still required
- But rationalized compared to previous requirements
- Clear guidelines on what's needed
- Standardized formats reduce confusion
Steps for Investors to Claim Duplicate Securities
Based on the revised norms, here's a general process investors should follow:
Step 1: Determine Security Value
Calculate the current market value of lost/damaged securities to determine which documentation category applies.
Step 2: Prepare Required Documents
- For securities up to Rs 10,000: Affidavit-cum-Indemnity Bond (no notarization needed)
- For securities Rs 10,000 to Rs 10 lakh: Notarized Affidavit-cum-Indemnity Bond
- For securities above Rs 10 lakh: Additional documentation as specified by SEBI
Step 3: Contact the RTA or Company
Submit documents to the Registrar and Transfer Agent or directly to the company's investor relations department.
Step 4: Provide Identification and Verification
Submit KYC documents and any other identification required by the RTA.
Step 5: Receive Duplicate in Demat Form
Once processed, duplicate securities will be credited to your demat account.
Regulatory Evolution and Future Outlook
This circular represents part of SEBI's ongoing efforts to modernize capital market regulations and reduce friction in investor processes. Recent years have seen several investor-friendly reforms:
- Simplified KYC procedures
- Introduction of ASBA for IPO applications
- Online account opening for trading and demat accounts
- Faster resolution of investor grievances through SCORES platform
- Enhanced disclosure requirements for better transparency
The duplicate securities circular fits into this broader pattern of regulatory modernization aimed at making Indian capital markets more accessible and investor-friendly.
Compliance Timeline
Key dates investors should note:
- Circular Issuance: Late Wednesday (exact date to be confirmed)
- Effective Date: Immediate implementation from issuance date
- Company/RTA Compliance: Must implement revised procedures immediately
- Previous Applications: Continue under old framework without resubmission requirement
- New Applications: Must follow revised procedures and thresholds
Frequently Asked Questions
Q: What if my securities are valued exactly at Rs 10 lakh?
Securities valued at Rs 10 lakh would fall under the simplified documentation category, qualifying for the relaxed procedures.
Q: How is the security value calculated?
Typically based on the current market price of the securities. Investors should check with their RTA for the specific valuation method used.
Q: Can I get duplicate physical certificates?
No. SEBI has mandated that duplicate securities must be issued in dematerialized (electronic) form only.
Q: What if I don't have a demat account?
You'll need to open a demat account with a depository participant before you can receive duplicate securities.
Q: Do these rules apply to all types of securities?
The circular applies to securities of listed companies. Specific provisions should be confirmed with the relevant RTA.
Conclusion
SEBI's decision to ease norms for duplicate securities represents a pragmatic and investor-friendly regulatory reform. By doubling the simplified documentation threshold to Rs 10 lakh, waiving notarization for securities up to Rs 10,000, and standardizing required formats, the regulator has significantly reduced the compliance burden on investors while maintaining necessary safeguards.
These changes will benefit a wide range of investors—from small retail shareholders to those with more substantial holdings—by making it easier, faster, and more cost-effective to reclaim lost or damaged securities. The mandated issuance of duplicates in demat form will also accelerate the shift away from physical certificates, enhancing security and convenience for all market participants.
Investors who have lost securities or possess damaged certificates should take advantage of these simplified procedures to ensure their holdings are properly recorded and accessible. The immediate implementation of these norms means investors can benefit from the streamlined process right away.
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