Simplification of procedure for transmission of securities

Simplification of procedure and standardization of formats of documents for transmission of securities pursuant to amendments to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

1. SEBI has reviewed the process being followed by the Registrars to an Issue and Share Transfer Agents (“RTAs”) and the Depositories/ Issuer companies for effecting transmission of securities.
   
2. As an on-going measure to enhance ease of dealing in securities markets and with a view to make the transmission process more efficient and investor friendly, the procedure for transmission of securities has been further simplified vide the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations, 2022 (“LODR Amendment Regulations”) Gazette Notification no. SEBI/LAD-NRO/GN/2022/80 dated April 25th, 2022).
   
3. The LODR Amendment Regulations has inter alia enhanced the monetary limits for simplified documentation for transmission of securities, allowed ‘Legal Heirship Certificate or equivalent certificate’ as one of the acceptable documents for transmission and provided clarification regarding acceptability of Will as one of the valid documents for transmission of securities. Pursuant to the notification of the LODR Amendment Regulations, this Circular is being issued to specify the formats of various documents which are required to be furnished for the processing of transmission of securities.
   
4. For ease of reference, a ready reckoner listing out the documents required for transmission of securities, in case of demise of the sole holder, is provided in Annexure –A to this Circular. The Operational Guidelines for processing investor’s service request for the purpose of transmission of securities are provided in Annexure –B to this Circular.
   
5. The format of the form to be filed by nominee/claimant/legal heir while requesting transmission of securities is provided in Annexure –C to this Circular.
   
6. The revised documentation requirements in case of transmission of securities are specified below :
   
   6.1 Where the securities are held in a single name with a nomination, nominee shall be informed about the procedure to be followed for the claim on the receipt of the intimation of death of the security holder.
   
   6.2 Where the securities are held in single name with a nomination, the following documents shall be submitted:
   (a)duly signed transmission request form by the nominee;
   (b)original death certificate or copy of death certificate attested by the nominee subject to verification with the original or copy of death certificate duly attested by a notary public or by a gazetted officer;
   (c)self-attested copy of the Permanent Account Number card of the nominee, issued by the Income Tax Department.
   
   6.3 where the securities are held in single name without nomination, the following documents shall be submitted:
   (a) duly signed transmission request form by the legal heir(s)/claimant(s);
   (b) original death certificate or copy of death certificate attested by the legal heir(s)/claimant(s) subject to verification with the original or copy of death certificate duly attested by a notary public or by a gazetted officer;
   (c) self-attested copy of the Permanent Account Number card of the legal heir(s)/claimant(s), issued by the Income Tax Department;
   (d) a notarized affidavit, in the format provided in Annexure –D to this Circular from all legal heir(s) made on non-judicial stamp paper of appropriate value, to the effect of identification and claim of legal ownership to the securities. However, in case the legal heir(s)/claimant(s) are named in any of the documents for transmission of securities as mentioned in serial number 7 in Annexure –A to this Circular, an affidavit from such legal heir(s)/claimant(s) alone shall be sufficient;
   (e) a copy of other requisite documents for transmission of securities as may be applicable as per Annexure –A to this Circular, attested by the legal heir(s)/claimant(s) subject to verification with the original or duly attested by a notary public or by a gazetted officer.
   
   6.4 In cases where a copy of Will is submitted as may be applicable in terms of Indian Succession Act,1925 (39 of 1925) the same shall be accompanied with a notarized indemnity bond from the claimant (appropriate beneficiary of the Will) to whom the securities are transmitted, in the format provided in Annexure –E to this Circular.
   
   6.5 In cases where a copy of Legal Heirship Certificate or its equivalent certificate issued by a competent Government Authority is submitted, the same shall be accompanied with:
   i. a notarized indemnity bond from the legal heir(s) /claimant(s) to whom the securities are transmitted, in the format provided in Annexure –E to this Circular.
   ii. No Objection from all non-claimants (remaining legal heirs), stating that they have relinquished their rights to the claim for transmission of securities,duly attested by a notary public or by a gazetted officer, in the format provided in Annexure –F to this Circular.
   
   6.6 For value of securities up to rupees five lakhs per listed entity in case of securities held in physical mode, and up to rupees fifteen lakhs per beneficial ownerin case of securities held in dematerialized mode, as on date of application by the claimant, and where the documents mentioned in serial number 9 in Annexure –A, are not available, the legal heir(s) /claimant(s) may submit the following documents:
   (i) a notarized indemnity bond made on non-judicial stamp paper of appropriate value in the format provided in Annexure –E to this Circular, indemnifying the Share Transfer Agent/ listed entity:
   (ii)no objection certificate from all legal heir(s) stating that they do not object to such transmission in the format provided in Annexure –F to this Circular or copy of family settlement deed executed by all the legal heirs, duly attested by a notary public or by a gazetted officer; and The listed entity may, at its discretion, enhance the value of securities from the threshold limit of rupees five lakhs, in case of securities held in physical mode.
   
7. For transmission of securities to the surviving joint holder(s), RTAs shall comply with clause 23 of Table F in Schedule 1 read with Section 56(2) & 56(4)(c) of the Companies Act, 2013, and transmit securities in favour of surviving Joint holder(s), in the event of demise of one or more joint holder(s), provided that there is nothing contrary in the Articles of Association of the company.
   
8. The common norms stipulated in SEBI Circular SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/655 dated November 03, 2021andSEBI Circular SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/687 dated December 14, 2021shall be applicable for transmission service requests.
   
9. In case the securities were held by the deceased holder in a single name and in physical mode, then after verifying and processing the documents submitted for transmission of securities, the RTAs/ Issuer companies shall intimate the claimant(s) about its execution as may be applicable, within 30 days of the receipt of such request, by way of issuing a Letter of Confirmation in the format provided in Annexure –G to this Circular.
   
10. The provisions of this Circular shall come into force with immediate effect in supersession of the following circulars:
    a)Circular No. CIR/MIRSD/10/2013 dated October 28, 2013,
    b)Circular No. SEBI/HO/MIRSD3/CIR/P/2016/0000000085 dated September 15, 2016,
    c)Circular No. SEBI/HO/MIRSD/DOP/CIR/P/2019/05 dated January 4, 2019, and
    d)Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/644 dated October 18, 2021.
    
11. Stock Exchanges and Depositories are advised to:
    a)make necessary amendments to the relevant bye-laws, rules and regulations, operational instructions, as the case may be, for the implementation of the above Circular; and
    b)to bring the provisions of this Circular to the notice of their constituents and also disseminate the same on their websites.
    
12. The RTAs/ listed issuers/ Depositories shall strictly adhere to the formats and documentation specified through this Circular for all transmission matters including requirement of Will.
    
13. This Circular is being issued to protect the interests of investors in securities and to promote the development of, and to regulate the securities market read in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 101 of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements), 2015.

Annexures

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