The Securities and Exchange Board of India (SEBI) has implemented comprehensive reforms to streamline the process of obtaining duplicate securities, significantly reducing compliance burden for investors. The regulator announced on Wednesday that it has doubled the monetary threshold for simplified documentation from ₹5 lakh to ₹10 lakh, making the process faster, more efficient and investor-friendly.

The SEBI move follows a consultation paper the market watchdog issued in November to ease investor compliance and remove inconsistencies. The regulator said the ₹5 lakh threshold was too small, no longer reflected current market realities, and imposed an avoidable procedural burden on investors.

Key Changes in Documentation Requirements

SEBI has introduced a tiered approach to documentation based on the value of securities held. The new framework establishes clear categories with specific requirements for each tier.

A significant relief for smaller investors is the elimination of notarisation requirements for the Affidavit-cum-Indemnity Bond when securities are valued up to ₹10,000. This change removes an additional procedural step that previously added time and cost to the process.

Five Key Points for Investors

The overhaul ensures that investors holding securities valued up to ₹10 lakh will now be required to submit fewer documents. Here are the essential points investors must know:

Previous Requirements and Changes

SEBI had prescribed the documentary and procedural requirements for issuing duplicate share certificates through its master circular. Under the previous rules, if the securities' value was ₹5 lakh or more, the security holder was required to submit a copy of FIR or police complaint or court injunction order along with details of the securities, folio number, distinctive number range and certificate numbers.

Investors were also required to advertise the loss of securities in a widely circulated newspaper and submit an affidavit and indemnity bond separately on non-judicial stamp paper. The SEBI paper noted that the value of securities could be less than the value of stamp duty in many cases, making the payment of stamp duty on two different instruments illogical.

Implementation and Immediate Effect

The changes were made via a circular issued late Wednesday and the provisions came into force immediately. The new rules apply to all applications currently under process, with SEBI directing all listed companies and registrar and transfer agents (RTAs) to process requests strictly according to the revised procedures.

This move by SEBI is expected to reduce the compliance burden for investors significantly by making it easier for a larger number of investors to obtain duplicate securities with less paperwork and fewer procedural hurdles, while promoting dematerialisation across the securities market.

Markets regulator SEBI has announced comprehensive changes to the Basic Services Demat Account (BSDA) framework, aimed at making investing more accessible for small investors while reducing compliance burden for depository participants (DPs). The regulator officially decided to exclude Zero Coupon Zero Principal (ZCZP) bonds and delisted securities from the valuation threshold used to determine BSDA eligibility.

Key Regulatory Changes

The most significant reform involves excluding specific securities from BSDA eligibility calculations. SEBI stated in its latest circular that the value of ZCZP bonds and delisted securities will not be counted while checking BSDA eligibility. This decision follows feedback received from market participants after the earlier circular issued on June 28, 2024.

Enhanced Valuation Framework

SEBI has established clearer guidelines for security valuation within BSDA accounts. For valuation purposes, the value of holdings will be based on daily closing prices or Net Asset Values (NAVs). When prices are not available, the last traded price may be used. For unlisted securities other than mutual fund units, face value can be considered.

For illiquid securities, DPs will calculate the account value using the last available closing price. However, the value of suspended securities, delisted securities, and ZCZP bonds will not be considered at all while determining BSDA eligibility.

Mandatory Quarterly Reviews and Default Conversion

Under the new framework, DPs are now required to review the BSDA eligibility of all accounts every quarter, replacing the previous occasional review system. The regulator has mandated that if an investor is eligible for BSDA, the DP must open or convert the account into BSDA by default.

Investors who prefer to maintain a regular demat account instead of BSDA must provide their active consent through a verifiable and authenticated channel prescribed by the depositories. DPs will have to reassess all existing demat accounts every quarter and convert all eligible accounts into BSDA unless the investor specifically consents to continue with a regular demat account.

Implementation Timeline and Background

These changes will come into effect from March 31, 2026, providing market participants sufficient time to adapt their systems and processes. The Basic Services Demat Account facility was originally introduced by SEBI in 2012 to reduce the burden of demat charges on investors with small portfolios.

BSDA serves as a more basic version of a regular demat account, with the value of holdings required to be below ₹10.00 lakh to maintain eligibility for reduced charges and simplified services.