Sebi's New Proposal: A Major Relief for Investors with Lost Certificates
In a significant move aimed at reducing procedural hassles for investors, the Securities and Exchange Board of India (Sebi) has proposed a streamlined and more cost-effective process for obtaining duplicate certificates for lost or misplaced securities. This initiative seeks to standardize what has been a fragmented and cumbersome experience for countless individuals holding shares, bonds, or mutual fund units.
Key Changes in the Simplified Process
The markets regulator has put forth several crucial amendments. Firstly, it plans to double the upper limit for issuing duplicate securities without requiring an FIR or a newspaper advertisement. The current threshold of Rs 5 lakh will be raised to Rs 10 lakh, acknowledging the substantial growth in the average portfolio size of Indian investors.
Secondly, Sebi is moving to eliminate redundant paperwork. The existing dual requirement of submitting both a separate affidavit and an indemnity bond will be replaced by a single, consolidated affidavit-cum-indemnity bond. This approach, already successfully implemented by the Investor Education & Protection Fund Authority under the finance ministry, will significantly cut down on time and cost for applicants.
Addressing Investor Pain Points
The decision comes after Sebi received consistent feedback from investors and other market participants about the difficulties posed by the current three-step process. Previously, an investor had to navigate a complex maze: filing a police complaint or an FIR, publishing a newspaper advertisement about the loss, and then submitting both an affidavit and an indemnity bond on non-judicial stamp paper.
Sebi noted that the lack of standardization, with different registrar and transfer agents (RTAs) and listed companies following their own documentation approaches, compounded the problem. The regulator stated that the Rs 5-lakh limit was set years ago and no longer reflects the reality of an Indian securities market that has expanded significantly in terms of market capitalisation and investor participation. The new proposals are designed to align the process with current market realities and lift an avoidable procedural burden from the shoulders of investors.
