SEBI eases investment claim process for heirs

India’s markets regulator has proposed changes to simplify how families claim investments after an investor’s death, cutting paperwork and setting strict deadlines for companies to process claims.

21-day deadline for claims

Under the new plan, companies and financial institutions will have 21 days to complete a claim once all required documents are submitted. If they reject an application or miss the deadline, they must explain the reason in writing.

This should reduce the number of trips families have to make to offices, according to the proposal. The regulator has invited public feedback on the changes until April 2.

Faster processing for small claims

For smaller amounts, a straight-through processing (STP) system is being introduced. Physical shares worth up to ₹10,000 and dematerialized shares up to ₹30,000 can be processed with minimal paperwork. This aims to help cases where the cost of obtaining documents exceeds the value of the investment.

The threshold for simplified documentation has also been raised. Physical shares up to ₹10 lakh and demat shares up to ₹30 lakh will now qualify for an easier process. Companies can choose to extend the ₹10 lakh limit for physical shares if they wish.

Multiple options for death certificates

Original death certificates will still be required, but verified copies attested by a notary or gazetted officer will also be accepted. Certificates with QR codes will be valid as well.

If the deceased had named a nominee, the process becomes simpler. Nominees will only need to submit a claim form, the client master list from the demat account, a death certificate, and ID proof. The investment can then be transferred directly to the nominee’s name.

What happens when there’s no nominee or will

If no nominee is listed and no will exists, small STP claims can still proceed with a basic form and ID proof. For larger claims within the new limits, an indemnity bond and a no-objection certificate from other legal heirs may be required.

For investors who lived abroad, documents verified by local bank officials or the Indian embassy will be accepted.