Ease of Doing Investment and Ease of Doing Business – Doing away with requirement of issuance of Letter of Confirmation (“LOC”) and to effect direct credit of securities in dematerialisation account of the investor
Vide this circular, the Securities and Exchange Board of India (SEBI) has decided to simplify the process for crediting securities arising from investor service requests (ISR) such as issuance of duplicate certificates, transmission, transposition, corporate actions, and claims from unclaimed suspense accounts. The objective is to ensure ease of investing, reduce timelines, and eliminate risks associated with issuance of Letter of Confirmation (LOC).
The provisions of this circular shall come into force from April 02, 2026. Any LOC issued before this date may be submitted for dematerialisation within 120 days from the date of issuance.
Key highlights of the Circular: –
1. Direct Credit to Demat Accounts:
- RTAs/listed companies shall credit securities directly to investors’ demat accounts after necessary due diligence.
- Investors must provide the latest Client Master List (CML) of their demat account (not older than 2 months) duly attested by the Depository Participant (DP) along with the service request.
2. Processing Timelines:
- RTAs/issuer companies shall verify and process requests and complete the demat credit within 30 days of receipt of a complete request.
3. Physical Certificates:
- RTAs shall retain physical certificates (if available) and deface them with the stamp “Securities issued in dematerialised form.”
- In cases where the certificate is lost, defacing is not required.
4. Transmission / Inheritance Cases:
- Securities held in physical mode by deceased holders can be transmitted directly to claimants’ demat accounts within 30 days.
5. Duplicate Securities Requests:
- Investors must submit affidavits/undertakings and Form ISR-4 along with the demat details.
- Post verification, securities shall be credited directly to the demat account.
6. Lock-in Requirements:
- For securities subject to lock-in, RTAs shall inform the depository while crediting securities to the investor’s demat account.
Listed Companies, RTAs, and Depositories must ensure adherence to the revised procedures and timelines as prescribed under SEBI’s updated Master Circular.
