SEBI Simplifies the Procedure for Issuance of Duplicate Securities Certificates

Prabhat Nigam

28 May, 2022

Indian market regulator, the Securities and Exchange Board of India (SEBI), has released guidelines on the issuance of duplicate securities certificates. These guidelines have been issued with the purpose of simplifying the procedure and standardising the formats of documents that are submitted for the issuance of duplicate securities certificates.     

Who Are The Entities To Whom The Guidelines On Issuance Of Duplicate Securities Certificates Have Been Made Applicable?

The guidelines titled “simplification of procedure and standardisation of formats of documents for issuance of duplicate securities certificate” are applicable to the following entities:

1. All SEBI registered Registrars to an Issue and Share Transfer Agents (RTAs)
2. All Recognised Stock Exchanges
3. All Listed companies through recognised Stock Exchanges 
4. All Asset Management Companies (AMCs)
5. All Investor Associations

Highlights of the Guidelines on the Issuance of Duplicate Securities Certificates   

On 25th May 2022, SEBI issued guidelines simplifying the procedure and standardising the formats of the documents required for the issuance of duplicate securities certificates^[1]. This step has been taken to make the process of issuance of duplicate securities certificates more efficient and investor-friendly. Efforts have been made to put in place operational guidelines to process investors’ service requests to issue duplicate securities certificates. The guidelines provide a list of documents which the security holders need to submit to receive duplicate securities certificates.   

Documents and Procedure to be followed by the Securities Holder

The following documents are required to be submitted by a security holder while applying for duplicate securities certificates:

1. Copy of the FIR (including e-FIR) having details of the securities, folio number, distinctive number range and certificate numbers.
2. Advertisement in a widely circulated newspaper regarding loss of securities
3. Submission of Affidavit and indemnity bond according to the format prescribed by the Board.
4. The requirements under points 1 and 2 are not supposed to be met if the value of the securities on the date of submission of application, along with complete documentation prescribed by the Board, does not exceed the number of Rupees 5 lakhs.
5. The applicant is supposed to quantify the value of the securities on the basis of the closing price of such securities at one of the SEBI recognised stock exchanges a day prior to the date of making of such application.
6. An overseas security holder, in lieu of the documents mentioned under point 1, has been permitted to provide self-declaration regarding the security certificate lost/ misplaced/ stolen, which has to be duly notarised/ apostilled/ attested by the Indian Consulate/ Embassy in the country of his residence. Self-attested copies of the valid passport of the security holder and overseas address proof also need to be submitted by the security holder.
7. In case of non-availability of certificate number or folio number, the RTA, upon request made by the security holder, will provide the same to the security holder only if the signature and address of the security holder match with the RTA and listed company’s records.

Where the signature and/ or address do not match, the security holder will then need to comply with the KYC (Know Your Customer) procedure. Once the security holder is done with the KYC process, the details of the securities will be provided by the RTA or by the listed company itself.

SEBI has mandated that forged/ fake/ stolen certificates or those certificates against which duplicate certificates have been issued must be seized and defaced by the RTA or the listed company and disposed of in the manner authorised by the listed Company’s Board.

Listed companies to take contingent insurance policy

In order to protect the interests of the companies, SEBI has asked these listed companies to take a special contingent insurance policy from the insurance company against the risks arising out of the requirements related to the issuance of duplicate security certificates. It must be noted that according to guidelines, the duplicate securities shall be issued in a dematerialised mode only.

Additional Documents from the annexure are to be submitted by the Securities Holder    

1. Form A of the annexure which is an affidavit for issuance of duplicate security certificates
2. Form B of the annexure which is an indemnity for issuance of duplicate securities
3. Form C of the annexure contains the format of the Letter of Confirmation
4. Investor Service Request Form – 4 (ISR 4)

The guidelines mandate that the RTAs or the Listed Companies need to strictly adhere to the formats and documentation provided in the annexure of these guidelines for all the service requests related to the issuance of duplicate security certificates.

It is encumbent upon the stock exchanges to bring the particulars of these guidelines to the notice of listed companies and disseminate this information through their official websites.

This Circular has been issued in furtherance of the powers conferred under s. 11(1) of the SEBI Act, 1992, and the purpose of this circular is to protect the interests of investors and promote the development and regulation of the securities market.  

Date of Coming into Effect

The said guidelines have been released by SEBI after reviewing the process followed by the RTAs and the issuer companies in issuing the duplicate securities certificates. The market regulator has also taken into consideration the feedback from the investors and recent regulatory changes.  

According to SEBI, this framework for issuance of duplicate securities certificates shall come into force with immediate effect.

Read Our Article: Procedure for Issuance of Duplicate Share Certificate