SEBI Eases Norms for Issuance of Duplicate Securities; Raises Simplified Process Limit to ₹10 Lakh
New Delhi (Economy India): In a move aimed at simplifying investor compliance and strengthening market efficiency, the Securities and Exchange Board of India (SEBI) on Wednesday announced a major regulatory change in the issuance of duplicate securities. The capital markets regulator has doubled the monetary threshold for a streamlined documentation process from ₹5 lakh to ₹10 lakh, a shift expected to benefit a broad base of retail investors.
Under the new framework, investors holding securities valued up to ₹10 lakh will now be eligible for an easier and faster mechanism to obtain duplicate share certificates in case of loss, theft, damage, or mutilation of original certificates. The overhaul is designed to remove procedural friction and bring greater consistency across market practices.
In a carefully worded circular issued on Wednesday, SEBI said the simplified procedure would reduce paperwork requirements, minimise investor grievances, and promote investor-friendly governance. The regulator emphasised that the initiative aligns with its broader goal of creating a more efficient and trusted securities market that serves the needs of all stakeholders.
Background: Why Duplicate Securities Matter
Every share certificate or security entitles its holder to ownership in a company. In physical form, these certificates were once the primary evidence of ownership. Although the Indian securities market has largely migrated to dematerialised (demat) format, physical certificates remain relevant—particularly for older holdings or in cases where investors have not fully transitioned to electronic ownership.
Loss, theft, or damage to physical securities can create significant distress for investors, often requiring them to navigate a complex maze of documentation, indemnity bonds, and compliance steps to secure duplicates. Such processes have traditionally been time-consuming and burdensome, particularly for elderly investors or those with limited access to advisory services.
Recognising these challenges, SEBI had, in the past, allowed a simplified procedure for smaller-value securities, reducing the paperwork burden for investors with holdings up to ₹5 lakh. The latest change expands this threshold, bringing more investors under the simplified regime.
What’s New: Key Features of SEBI’s Policy Change
➤ Higher Threshold for Simplified Process
Under the revised circular:
- The monetary limit for a simplified documentation process has been raised from ₹5 lakh to ₹10 lakh.
- Investors holding securities valued up to ₹10 lakh can now seek duplicate certificates with fewer documents and less administrative burden.
➤ Documentation Requirements Reduced
SEBI’s updated norms allow eligible investors to submit minimal paperwork, eliminating several procedural steps that previously delayed duplicate issuance.
➤ Greater Investor Protection and Clarity
The regulator clarified that the revised norms would:
- Apply equally to equity, preference shares, bonds and debt instruments held in physical form.
- Support faster turnaround times for duplicate certificate issuance.
- Reduce operational complexities for registrars and transfer agents (RTAs), custodians, and intermediaries.
SEBI’s Rationale: Markets for Investors, Not Barriers
In its circular, SEBI highlighted the need to reprioritise investor convenience while maintaining compliance integrity. The regulator stated that the move is part of a broader “investor-centric reform agenda” aimed at:
- Reducing administrative friction
- Harmonising practices across intermediaries
- Ensuring consistency with global best practices
“By raising the threshold for simplified duplicate issuance procedures to ₹10 lakh, SEBI aims to make the process more efficient, transparent and user-friendly,” the regulator said in a statement. “This will particularly benefit retail investors, while also contributing to overall market confidence.”
Market participants believe this reform is a continuation of SEBI’s evolving regulatory posture, which has included measures to improve corporate governance, strengthen investor protection frameworks, and enhance digital interfaces for compliance.
How the New Regime Works: Step-by-Step
📍 1. Eligibility Check
Investors must first determine that the aggregate value of their securities held in physical form does not exceed the revised threshold of ₹10 lakh.
📍 2. Application to RTA or Issuer
Eligible investors can apply directly to the Registrar & Transfer Agent (RTA) or the issuing company, citing loss, theft, or damage.
📍 3. Minimal Documentation
The RTA or issuer will require:
- A standard application form
- Self-attested identity proof
- A simple declaration regarding the loss/damage of certificates
SEBI’s revised norms reduce or eliminate the need for extended indemnity bonds, affidavits, or advertising in newspapers, unless mandated by exceptional circumstances.
📍 4. Issuance and Verification
On verification, the RTA/issuer issues the duplicate certificate. Digital tracking and reference systems help further streamline the process.
What This Means for Investors
Financial analysts and investor rights advocates have welcomed the move, noting several immediate advantages:
Lower Compliance Burden
With fewer documents required, the process becomes less intimidating—especially for new or first-time investors.
Faster Turnaround
Shorter verification steps are expected to significantly reduce processing times, from weeks to a matter of days in many cases.
Enhanced Protection for Small Investors
Investors with smaller portfolios—especially senior citizens and retail holders—stand to benefit the most from simplified access.
Boost to Market Confidence
By reducing procedural hurdles, SEBI aims to strengthen trust in the Indian securities ecosystem, particularly among retail segments.
Registrar & Transfer Agents (RTAs): A Key Link
One critical aspect of the reform is the role played by RTAs, such as Karvy, CAMS, and others, which act as intermediaries between investors and issuers.
Under the new guidelines:
- RTAs are expected to update their internal processes to align with SEBI’s simplified norms.
- RTAs must ensure consistent application of eligibility criteria across cases to avoid processing delays or disputes.
Industry sources indicate that RTAs have welcomed the clarity, though some have noted the need for robust digital interfaces and automated checks to handle the expected volume of simplified requests.
Industry Reaction: Support and Suggestions
Market experts and investor groups have lauded the move, though some have also suggested further enhancements.
📊 Positive Signals
- Reduced compliance cost for individual investors
- Lower administrative workload for intermediaries
- Alignment with global market practices
🛠️ Calls for Further Reform
Some stakeholders have urged SEBI to:
- Expand the simplified regime to include nominee and transmission cases
- Introduce digital lodgement and e-verification
- Offer online status tracking for duplicate certificate requests
A veteran broker said, “This is a welcome step, but the process can become truly frictionless only when it’s fully digital—end-to-end—and linked with demat transition drives.”
Why It Matters: The Broader Market Context
The move comes at a time when India’s capital markets are witnessing:
- Growing retail investor participation
- Increased migration to dematerialised (demat) holdings
- Rising demand for regulatory clarity and accountability
While demat accounts are now the primary mode of holding securities, a significant number of older investors and legacy holdings still exist in physical form. Making it easier to handle certificates in these cases ensures that no investor segment is left behind.
Analysts believe that this policy change, though specific in scope, signals SEBI’s broader orientation toward simplification, digitisation, and retail friendliness.
Economy India Takeaway
SEBI’s decision to raise the threshold for simplified issuance of duplicate securities to ₹10 lakh is a small but meaningful reform that reflects a deepening focus on investor experience and process efficiency in India’s capital markets.
By lowering administrative barriers, reducing paperwork, and harmonising regulatory practice, SEBI is sending a clear message: investor protection and convenience are intrinsic to market growth.
This development not only eases compliance for those directly affected but also strengthens the overall ecosystem by promoting trust, transparency and accessibility—key pillars of a robust securities market.
(Economy India)
