Transmission of Securities: SEBI Enhances Threshold Limit to Rs5 Lakh; To Accept Heirship Certificate Issued by Competent Govt Authority
Moneylife Digital Team 29 March 2022
Market regulator Securities and Exchange Board of India (SEBI) on Tuesday decided to amend regulations to simplify the procedure for transmission of securities, including increasing the threshold limit for documents. SEBI also decided to strengthen the regulatory framework for collective investment schemes (CIS) in line with mutual fund regulations to remove regulatory arbitrage. 
 
The board, which met in Mumbai, approved the proposal to amend the SEBI (Listing Obligations and Disclosure Requirements (LODR)) Regulations to simplify of procedure for the transmission of securities.
 
The existing threshold limit for simplified documents has been revised to Rs5 lakh from Rs2 lakh for securities held in physical mode per listed issuer and to Rs15 lakh from Rs5 lakh for securities held in the dematerialised mode for each beneficiary account.
 
SEBI says, "Legal heirship certificate or its equivalent certificate issued by competent government authority will be an acceptable document for transmission of securities."
 
"The objective is to ensure that uniform processes are followed by the registrars to an Issue and share transfer agents (RTAs) and listed companies which would further ease the transmission process for investors," it added.
 
The SEBI board also decided to amend CIS regulations. This includes enhancing net-worth criteria and having a track record in the relevant field as an eligibility requirement for registration as a collective investment management company (CIMC).
 
Further, CIMC and it's group, associates or shareholders are restricted to 10% shareholding or representation on the board of another CIMC to avoid conflict of interest. CIMC and its designated employees are mandated to invest in the CIS to align their interests with that of the scheme.
 
There would be a mandatory requirement of a minimum number of investors, maximum holding of a single investor and minimum subscription amount at CIS level. The CIS is required to rationalise fee and expenses to be charged to the scheme and reduce timelines for the offer period of the scheme, allotment of units and refund of money to investors, SEBI says.
 
The board also considered and approved the amendments to the SEBI (Custodian) Regulations, 1996, to enable SEBI registered custodians to provide custodial services regarding silver or silver-related instruments held by silver exchange-traded funds (ETFs) of mutual funds.
 
Comments
pdc1sh
2 months ago
Please let me know, whether this amendment is currently followed by RTA's? I had checked with one of them they said they have no circular on the same & threshold amount is still 2 lakhs. Please reply when it will come into effect? Aslo in some cities legal heirship certificate is not issued unless deceased person is govt. Employee so it doesn't work for everyone. Please kindly reply.
joshifarms
Replied to pdc1sh comment 2 months ago
Fully Agree with you , circular /Amendment is yet to reach RTA s ,, you can write to SEBI for more clarification
https://scores.gov.in/scores/Welcome.html , here you can make a complain too
pdc1sh
Replied to joshifarms comment 2 months ago
Already written Mail to SEBI. Reply awaited. Also have found circular on their website for the same it is dated 25/4/2022.
kcganga2108
3 months ago
Request someone to explain if this relates to transfer of the shares/ securities held in our Demat accounts to a legal heir? I thought having a nomination done should be sufficient for the securities to be transferred to the Nominee who then is responsible for the disposal of the same unless he himself is the heir.
joshifarms
Replied to kcganga2108 comment 3 months ago
If you hav Nomination done with your DP -- you need not worry , the above is for one who is a sole holder and dies intestate --- meaning without nominating ,, or without WILL ..
joshifarms
3 months ago
This is a good news , as now value of Rs. 2 lakh is hardly anything compared to price of Shares of blue chip companies. this would save from un-necessary running arounf to court and spending money, some times more than value of shares . for heirShip certificate,
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