Introduction

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The Securities and Exchange Board of India (SEBI) has made it easier for nominees to claim shares. In a circular issued on October 4, 2023, SEBI introduced a centralized mechanism for reporting and verification in case of the demise of an investor.

Link to Read :- https://www.sebi.gov.in/legal/circulars/oct-2023/centralized-mechanism-for-reporting-the-demise-of-an-investor-through-kras_77534.html

Under the new mechanism, the nominee of a deceased investor can claim shares by submitting a death certificate and a transmission request form to the depository participant (DP). The DP will then verify the documents and transmit the shares to the nominee’s name.

Previously, the nominee had to submit a separate transmission request form to each of the companies in which the deceased investor held shares. This was a cumbersome process and could take several weeks or even months to complete.

The new centralized mechanism is expected to make it easier and faster for nominees to claim shares. It is also expected to reduce the workload of DPs and companies.

Benefits of the new mechanism

The new centralized mechanism for claiming shares offers a number of benefits to nominees, including:

  • It is a simpler and faster process than the previous system.
  • It reduces the workload of DPs and companies.
  • It makes it easier for nominees to track the status of their claims.
  • It is more transparent and efficient.

How the new mechanism works

To claim shares under the new mechanism, the nominee must follow these steps:

  1. Obtain a death certificate of the deceased investor.
  2. Fill out a transmission request form. This form is available on the websites of DPs and companies.
  3. Submit the death certificate and the transmission request form to your DP.
  4. The DP will verify the documents and transmit the shares to your name.

You will receive a confirmation message from your DP once the shares have been transferred to your name.

Additional information

In addition to the above, here is some additional information about the new centralized mechanism for claiming shares:

  • The new mechanism is applicable to all demat accounts, irrespective of the date on which they were opened.
  • The new mechanism is also applicable to all types of shares, including equity shares, preference shares, and debentures.
  • The new mechanism is not applicable to physical shares.

Impact on the stock market

The new centralized mechanism for claiming shares is expected to have a positive impact on the stock market. It is expected to make it easier and faster for nominees to claim shares, which could lead to increased investment in the stock market.

The new mechanism is also expected to reduce the workload of DPs and companies, which could lead to lower costs for investors.

Conclusion

The new centralized mechanism for claiming shares is a positive development for nominees and investors. It is expected to make it easier and faster for nominees to claim shares, and to reduce the workload of DPs and companies.

Additional blog post content

In addition to the above, here is some additional blog post content on the topic of SEBI making it easier for nominees to claim shares:

What to do if you are a nominee

If you are a nominee of a deceased investor, you should take the following steps to claim the shares:

  1. Obtain a death certificate of the deceased investor.
  2. Fill out a transmission request form. This form is available on the websites of DPs and companies.
  3. Submit the death certificate and the transmission request form to your DP.
  4. The DP will verify the documents and transmit the shares to your name.

Once the shares have been transferred to your name, you can hold them or sell them. If you sell the shares, you will be responsible for paying capital gains tax on any profits.

How to choose a DP

When choosing a DP, there are a few factors to consider, such as:

  • Fees: DPs charge different fees for their services. Compare the fees of different DPs to choose the one that offers the best value for money.
  • Services: DPs offer different services, such as online trading, margin trading, and demat account services. Choose a DP that offers the services that you need.
  • Reputation: Choose a DP that has a good reputation. You can read online reviews or ask friends and family for recommendations.

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