Sebi’s Proposal to Simplify Duplicate Security Issuance Analyzed

The Securities and Exchange Board of India (Sebi) is making a big change to make it easier for investors to get copies of their stock certificates. Currently, investors have to provide a lot of paperwork when they report lost or stolen shares. Sebi wants to increase the amount investors need to prove their ownership, aiming to reduce confusion and make the process smoother.

• Sebi raises duplicate security threshold to Rs 10 lakh.
• Increased limit reflects market growth and investor portfolio size.
• New rules simplify reporting lost securities for investors.
• Common affidavit form reduces paperwork and cost for investors.
• State-based stamp duty aligns with existing investor regulations.
• Formalizes industry practice: Listed firms issue loss ads.

The problem is that investors have to provide different documents depending on the company they invested in. This causes a lot of hassle and confusion. Sebi recognizes that the current standard of Rs 5 lakh isn’t enough because the market has grown a lot since it was set.

To fix this, Sebi proposes doubling the amount investors need to prove they own shares. They’re raising the limit to Rs 10 lakh. This means fewer documents need to be filed, making the process much simpler.

Sebi is also introducing a standard form that all companies can use, further streamlining the process. Furthermore, they want stamp duty to be calculated based on where the investor lives, just like with the Investor Education and Protection Fund Authority.

This change also addresses a common industry practice: most listed companies already publish ads about lost shares. Sebi wants to make this official, ensuring companies take responsibility for this step. Finally, increasing dematerialization of securities is expected as a result of this change.

“This initiative will dramatically improve the investment experience for all Indian investors.”