SEBI Proposal: SEBI has proposed to double the monetary limit of the simplified document required for issuing a copy of securities from the existing Rs 5 lakh to Rs 10 lakh. Its purpose is to make compliance easier for investors and remove discrepancies in documents.
SEBI’s statement
“Due to non-standardisation of documents and different methods adopted by registered transfer agents (RTAs) of listed companies, investors face problems in getting different documents prepared for different listed companies,” the Securities and Exchange Board of India (SEBI) said.
The regulator also said that the current limit of Rs 5 lakh for availing the simplified documentation was set several years ago. Since then, the country’s securities market has grown significantly in terms of capitalization, investor participation and average investment size.
Documents will be simplified
Under the simplified documentation regime, investors are exempted from filing copies of FIRs, police complaints, court orders or newspaper advertisements. Taking note of this, SEBI said that the value of individual security holdings has increased significantly. As a result, maintaining the earlier limits is no longer in line with current market realities and creates procedural hurdles for investors.
“Keeping in view the above and to provide ease of investment and procedural convenience to investors, it is proposed to increase the simplified documentation regime limit for issue of duplicate securities from Rs 5 lakh to Rs 10 lakh,” SEBI said in its consultation paper.
To make the process more streamlined, the regulator has proposed to introduce a common affidavit-cum-indemnity form, which will also reduce the cost of obtaining duplicate securities. Additionally, it is proposed that stamp duty be levied on the basis of the investor’s state of residence, in line with the activities adopted by the Investor Education and Protection Fund Authority.
Currently, for issue of duplicate securities, investors are required to submit a number of documents. This includes copies of FIR or police complaint giving details of security and certificate number, advertisements in newspapers and separate affidavits executed on non-judicial stamp paper and indemnity bonds.
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