Guidance given by Securities and Exchange Board of India (‘SEBI’) on creation of ‘Suspense Escrow Demat Account’

SEBI has vide its circular dt: January 25, 2022 had directed listed entities to process all service requests in demat form.

Link: SEBI/HO/MIRSD/PoD-1/OW/P/2022/64923

SEBI had also provided a procedure vide which company will be sending a ‘Letter of Confirmation (‘LOC’) as against issue of physical duplicate, physical split share certificate etc. This LOC is valid for 120 days. Investor in whose name it is sent shall produce LOC to depository participant and then Depository participant shall credit shares as against this LOC.

But there might be a situation where the investor is unable to produce the LOC to the depository participant and get his entitlement (shares) credited to his demat account due to some reason. In that case SEBI had stated that such shares shall be credited to ‘Suspense Escrow Demat Account’. But there was no clarity on how and when to open this Suspense Escrow Demat account? Whether opening of this account is mandatory? Registrar and Share Transfer Agents (RTAs) have been following consistently with SEBI for guidance on this. Now SEBI has provided guidance in this regard as follows:

A. Opening of Suspense Escrow Demat Account:

  • Companies are required to open a separate demat account with the nomenclature “Suspense Escrow Demat Account” for the purpose of this circular
  • Companies which have not yet opened “Suspense Escrow Demat Account” and are currently using “Suspense Escrow Demat Account/unclaimed Suspense Account” as provided under Schedule VI of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the purpose of Letter of Confirmation cases, shall move securities pertaining to Letter of Confirmation cases to newly opened “Suspense Escrow Demat Account” latest by January 31, 2023.

B. Process to credit shares to Suspense Escrow Demat Account:

  • In cases where securities holder/claimant fails to submit the demat request to the depository participant within the period of 120 days from the date of issuance of letter of confirmation, RTA shall move the said securities to a physical folio “Suspense Escrow Demat Account” and issue a consolidated letter of confirmation to the Company for the said securities in the “Suspense Escrow Demat Account” on monthly basis.
  • Thereafter, the listed entity shall dematerialise these securities in “Suspense Escrow Demat Account” with one of the depository participants within seven days of receipt of such LOC from RTA. 
  • The listed entity shall maintain details of security holding of each individual securities holder(s) whose securities are credited to such “Suspense Escrow Demat Account”
  • “Suspense Escrow Demat Account” shall be held by the listed entity purely on behalf of the securities holders who are entitled to the securities and the securities held in such account shall not be transferred in any manner whatsoever except for the purpose of moving the securities from “Suspense Escrow Demat Account” to the security holder’s claimant’s demat account as and when the security holder/claimant approaches the listed entity

C. Process for claiming securities from Suspense Escrow Demat Account

  1. Securities which have been moved to ‘Suspense Escrow Demat Account’ may be claimed by the security holder / claimant on submission of following documents to RTA:
  • Duly filled in and signed form ISR-4
  • Client master list (‘CML’) of the demat account for crediting the securities to the security holder’s / claimant’s account provided the details in the CML should match with the details recorded with the RTA / issuer company

Disclaimer: This article provides general information existing at the time of preparation and we take no responsibility to update it with the subsequent changes in the law. The article is intended as a news update and Affluence Advisory neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this article. It is recommended that professional advice be taken based on specific facts and circumstances. This article does not substitute the need to refer to the original pronouncement



Affluence Advisory Pvt. Ltd. is established with the vision to provide one stop solutions to clients needs in ever changing environment. Affluence is managed by specialized team of Chartered Accountants, Company Secretaries, Corporate Lawyers and Other Professionals committed to provide quality experience to our clients in the widest spectrum of business needs.

Recent Posts

January 30th, 2023
Remuneration paid to Directors of the Listed Entity – Series 3
January 25th, 2023
Upgradation of E- Forms in tune with V3 portal
January 23rd, 2023
SEBI Notification dated 17/01/23 | Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2023
January 19th, 2023
Remuneration paid to Non-Executive Directors of Public Company – Series 2
January 16th, 2023
Remuneration paid to Whole Time Directors of Public unlisted Companies
January 11th, 2023
Relaxation from compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
January 9th, 2023
Online registration of units through MCA portal for ESI registration and inspection of units in this regard
January 6th, 2023
Guidance given by Securities and Exchange Board of India (‘SEBI’) on creation of ‘Suspense Escrow Demat Account’
January 5th, 2023
Change in Single Master Form (SMF) on FIRMS Portal
January 3rd, 2023
Relaxation with respect to conducting of Extra Ordinary General Meetings and Postal Ballots
December 30th, 2022
MCA extension for conducting Annual General Meetings through Video Conferencing or other Audio Visual Means (‘OAVM’)
December 23rd, 2022
Web-based Form DPT-3 as per New Rules
December 13th, 2022
Input Tax Credit (‘ITC’) on Corporate Social Responsibility (‘CSR’) expenses
December 7th, 2022
GSTR 9 and 9C – Optional to Mandatory reporting in FY 2021-22
September 27th, 2022
CSR Compliances as per New Rules 2022
September 20th, 2022
Mandatory appointment of Company Secretary
September 17th, 2022
Amendment To The Definition Of Small Company And Benefits
September 16th, 2022
Obligation to Indicate Director Identification Number (DIN)
September 8th, 2022
Compliance Calendar for the Month of September, 2022
September 7th, 2022
RBI issues Digital Lending Guidelines: Banks / NBFC
September 2nd, 2022
CSR Compliances as per New Rules and FAQ’s on National CSR Exchange Portal
August 20th, 2022
Physical Verification of Registered Office of the Companies by ROC
August 17th, 2022
Can the Company give Loans to Directors and Relatives?
August 13th, 2022
Startup Registration India 
August 8th, 2022
Misconceptions Regarding Filing of Annual Return and Applicability to Prepare Extract of Annual Returns.
August 5th, 2022
Compliance Calendar for the Month of August, 2022
July 26th, 2022
Ratification in context of Companies Act, 2013
July 21st, 2022
Non-Compliance in the use of KMP Designation – By Private Companies
July 18th, 2022
FAQs on GST applicability on ‘pre-packaged and labelled’ goods- reg
July 12th, 2022
RBI introduces mechanism for International trade settlements in Rupees (INR)
July 7th, 2022
July 6th, 2022
July 6th, 2022
FAQ – All you wanted to know about NBFCs
July 4th, 2022
FAQ’s- Disclosure of holding of specified securities and Holding of specified securities in dematerialized form
July 4th, 2022
Guidelines on Regulation of Payment Aggregators and Payment Gateways
July 1st, 2022
Ease of Doing Business in India
June 23rd, 2022
Change in nomination rule for Mutual Fund unit holders
June 21st, 2022
June 17th, 2022
 IBBI Update: Application under Rule 4, 6 or 7 of Insolvency and Bankruptcy (Application to Adjudication Authority) Rules, 2016
June 15th, 2022
Discussion Paper on enabling entities to become insolvency professional