SEBI Proposes Simplified and Standardized Procedure for Issuing Duplicate Securities
SDG 16: Peace, Justice and Strong Institutions | SDG 9: Industry, Innovation, and Infrastructure
Institutions: Securities and Exchange Board of India (SEBI) | Registrar Association of India (RAIN) | Ministry of Finance
The Securities and Exchange Board of India (SEBI) has released a consultation paper proposing measures to enhance the ‘Ease of doing investment’ by simplifying the procedure and standardizing the documents required for the issuance of duplicate physical security certificates (shares/bonds). The proposals stem from investor feedback and recommendations from the Registrar Association of India (RAIN).
The key measures proposed are:
Review of Simplified Documentation Limit: The current threshold for availing simplified documentation (which exempts the investor from submitting a copy of the FIR/Police complaint and issuing a newspaper advertisement) is proposed to be increased from ₹5 Lakhs to ₹10 Lakhs. This change is necessary because the ₹5 Lakh limit, set several years ago, no longer reflects the significant expansion in market capitalization and the material increase in the monetary value of individual security holdings.
Standardization of Documents: To reduce duplication of effort and financial inconvenience for investors—especially when the value of securities may be less than the stamp duty cost —SEBI proposes to merge the separate Affidavit and Indemnity bond into a single, standardized Affidavit-cum-Indemnity form. The stamp duty for this document will be applicable as per the state of residence of the investor.
Clarification on Advertisement: To formalize the current market practice, it is proposed that the listed company shall issue the advertisement regarding the loss of securities in a widely circulated newspaper, rather than the investor.
These measures aim to facilitate the restitution of investor rights, particularly for securities held in physical form. Since all duplicate securities issued under the new framework will necessarily be in dematerialised mode, the proposed changes are expected to result in increased dematerialisation of physical holdings across the market. The revised provisions will be applicable to new and ongoing requests for duplicate security issuance.
Policy Relevance: The comprehensive simplification effort demonstrates a clear regulatory focus on investor protection, ‘Ease of Doing Investment’, and promoting the digitalization of India’s securities market by removing friction points associated with physical shareholding documentation.
What are ‘Duplicate Securities’ and why are their procedures being reviewed? → Duplicate securities are replacement certificates issued to security holders when their original physical certificates are lost, stolen, or destroyed. The procedures are being reviewed because the non-standardization of documents and varied approaches across different Registrars to an Issue and Share Transfer Agents (RTAs) and listed companies create an undue “pain” point and procedural burden for investors seeking to recover their rights over physical securities.
What does Registrars Association of India do?→ The Registrars Association of India (RAIN) is a self-regulatory organization (SRO) that represents Registrars to an Issue and Share Transfer Agents (RTAs) in India’s securities market. RAIN serves as an industry body that acts as a bridge between its members (the RTAs) and the capital market regulator, the Securities and Exchange Board of India (SEBI). Its primary role involves promoting best practices and setting industry standards for services provided by RTAs, such as handling dematerialization requests, share transmission, and corporate actions. SEBI regularly consults with RAIN when drafting or amending regulations, such as in the case of simplifying procedures for issuing duplicate securities certificates, and RAIN is also required to disseminate investor protection documents like the Investor Charter on its website.
Follow the full update here: SEBI Consultation Paper on Review of Simplification of Procedure and Standardization of Formats for Issuance of Duplicate Securities Certificates