Introduction
When an investor dies, the shares, debentures or mutual fund units held in their name do not pass to the family automatically. They must be formally transmitted, and for years this process has been one of the most frustrating experiences for Indian families. Requirements differed from one company or Registrar and Share Transfer Agent (RTA) to the next, claimants were asked for documents in stages, and small holdings often stayed unclaimed because the paperwork cost more than the securities were worth.
The Securities and Exchange Board of India (SEBI) has now responded with Circular No. HO/38/13/11(14)2026-MIRSD-POD/I/17111/2026 dated July 23, 2026, titled “Ease of Doing Investment and Ease of Doing Business – Simplification and standardisation of the framework for transmission of securities.” The circular replaces case-by-case practice with a uniform, risk-based framework, adds a fast-track route for low-value claims, and puts processing entities on a fixed timeline.
Legal Basis of the SEBI Circular on Transmission of Securities
The circular is issued under Regulation 40(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), as amended by Gazette Notification No. SEBI/LAD-NRO/GN/2026/312 dated July 10, 2026. SEBI has also relied on its general power to protect investors and regulate the securities market under Section 11(1) of the SEBI Act, 1992, Section 19 of the Depositories Act, 1996, Regulation 101 of the LODR Regulations, and Regulations 37 and 38 of the SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 2025.
The framework binds every “processing entity”, a term that covers listed companies, RTAs, depositories, depository participants (DPs) and asset management companies (AMCs). It applies to listed securities and AMC-issued units where the sole holder, or all joint holders, have died. It came into force 30 days after issuance, which means it has governed transmission claims since August 22, 2026.
One limit is stated clearly at the outset. The framework does not apply where there is a dispute or where competing claims exist. In such cases, the claimants must settle their rights through judicial or legal proceedings, and the processing entity is not expected to decide between rival heirs.
Why SEBI Has Moved to a Risk-Based Transmission Process
The central idea behind the reform is that the documentation demanded should match the value at stake. A family claiming a few thousand rupees worth of shares should not be required to produce what an estate worth crores would need. SEBI has therefore divided claims into three categories, namely Quick Transmission Processing (QTP), simplified documentation, and claims above the simplified threshold, each carrying a progressively heavier documentary burden.
The value of the holding is to be worked out by the claimant using the previous closing price of the securities on any recognised stock exchange. For mutual fund units, the last available Net Asset Value is used. Because the claimant can pick any recognised exchange, the valuation rule is simple and avoids disputes over which price should govern.
Quick Transmission Processing for Low-Value Claims
Quick Transmission Processing is the most significant addition in the circular. It is meant for small investors whose claims are of low value, and it applies where the holding does not exceed ₹10,000 for securities in physical form or ₹30,000 for securities in dematerialised form. For physical securities, the limit is counted per listed entity, and for mutual fund or Specialised Investment Fund units held in Statement of Account form, it is counted per AMC. For demat holdings, the limit is counted per beneficial owner.
QTP is available only to immediate relatives of the deceased, which the circular defines as parents, spouse, children and parents-in-law. Such a claimant submits a transmission request form-cum-undertaking in the format at Annexure-2 on plain paper, along with a document proving the relationship. No stamp paper, indemnity bond or no-objection certificate from other heirs is needed at this stage. Relationship may be shown through a birth certificate naming the parent, school leaving certificate, school or service records, passport, marriage certificate, ration card, voter ID, Aadhaar, PAN, a Will, a legal heirship certificate, a court decree, a letter of administration, a succession certificate or a probate. Where none of these is available, the claimant may file a notarised affidavit in the format at Annexure-B, executed on non-judicial stamp paper and attested by a notary, Gazetted Officer or Judicial Magistrate First Class (JMFC).
The safeguard that makes this lighter process possible is the declaration in the form itself. The claimant states that they and the persons named are the only legal heirs, and accepts sole responsibility for any loss arising if the information later proves false, incomplete, forged or fraudulent. The claimant also agrees to keep the company, AMC, RTA, DP and depository fully indemnified against such loss.
Revised Thresholds Under the Simplified Documentation Framework
Above the QTP limit sits the simplified documentation category, which now covers holdings of up to ₹10 lakh in physical form and ₹30 lakh in dematerialised form. A listed entity may, at its discretion, raise the ₹10 lakh limit for physical securities, but it cannot lower it.
A claimant in this category must give a notarised indemnity bond in favour of the processing entity in the format at Annexure-4. In addition, the claimant must file either a notarised affidavit-cum-NOC from all legal heirs in the format at Annexure-5 or a copy of a family settlement deed signed by all legal heirs. The deed must be attested by a Notary Public or Gazetted Officer, or accepted and approved by a Magistrate, Judge or Civil Court. Both the indemnity and the affidavit-cum-NOC must be executed on non-judicial stamp paper of the value prescribed under the Stamp Act of the State where the claimant lives, so the stamp duty will vary from State to State.
The affidavit-cum-NOC has real legal effect. By signing it, non-claimant heirs voluntarily and unconditionally give up all present and future rights, title, interest and claim in the securities in favour of the claimant, and state that they have no objection to the transmission. Where a claimant produces a court-issued document such as a succession certificate, probate of Will, letter of administration or court decree, the indemnity bond and the NOC from non-claimant heirs are no longer required, because the court document itself settles the question of entitlement.
Documentation for Claims Above the Simplified Threshold
For higher-value holdings, the claimant must file a notarised affidavit-cum-NOC from all legal heirs, together with one of three succession documents. The first option is a copy of the Will, as applicable under the Indian Succession Act, 1925, along with a notarised indemnity bond. The second option is a legal heirship certificate or an equivalent certificate issued by a revenue authority not below the rank of Tehsildar, again with a notarised indemnity bond. The third option is a copy of a succession certificate, letter of administration or court decree. As in the simplified category, if a court-issued document is produced, the NOC from non-claimant heirs is not required.
Processing entities keep some discretion for these larger claims. They may seek documents beyond those prescribed by SEBI, but only where needed and only for reasons recorded in writing. The circular also requires that any such additional demand be consistent across processing entities for similar cases, which prevents one RTA from imposing requirements that another would not.
Removal of Mandatory Probate and Other Documentary Reforms
The circular removes the mandatory requirement of a probate of Will, which SEBI says is in line with recent amendments to succession laws. Under the new framework, a probate remains an acceptable document but is no longer the only route for claimants relying on a Will. A copy of the Will supported by an indemnity bond is sufficient for claims above the threshold. This is a substantial relief, since obtaining probate involves court proceedings and considerable time and expense.
SEBI has also replaced the separate affidavit and NOC that were earlier required with a single combined affidavit-cum-NOC. The idea of a “verifiable death certificate” has been broadened as well. A claimant may now submit an original death certificate, a copy attested by the nominee subject to checking against the original, a copy attested by a notary, Gazetted Officer or JMFC, or a death certificate carrying a QR code. The QR code option recognises that many States now issue digitally verifiable certificates, which can be checked without further attestation.
Transmission Where a Nominee Has Been Registered
Where the deceased had registered a nominee, the circular states that the nominee receives the securities as a trustee on behalf of the legal heirs of the deceased. This is an important clarification. A nominee is the person to whom the securities are handed over, but the nominee does not become their absolute owner as against the legal heirs. The beneficial entitlement continues to be governed by the law of succession that applied to the deceased.
The nominee needs only the Annexure-3 transmission request form, the latest client master list of their own demat account, a verifiable death certificate, and the original security certificate or a copy of the Statement of Account. If one of several nominees dies before the investor and the nomination was not changed, that nominee’s share passes to the surviving nominees on a pro rata basis. Once the securities are transmitted to the nominee, the processing entity is fully discharged from liability. Where several nominees exist, Part D of the form lets the other nominees consent to the claimant becoming the first holder, with themselves added as joint holders in the new folio.
Rule of Survivorship for Joint Holdings
Where one joint holder dies and others survive, the circular directs processing entities to keep following clause 23 of Table F in Schedule I, read with Section 56(2) and Section 56(4)(c) of the Companies Act, 2013, and to transmit the securities to the surviving joint holders, provided the company’s Articles of Association do not say otherwise. In these cases, the processing entity may ask only for a copy of the death certificate. It cannot demand KYC documents, indemnities or undertakings from the surviving joint holder, which removes a long-standing source of delay in joint accounts.
Proof of Death for Investors Who Die Outside India
Non-resident Indians and families with members abroad have often struggled to get foreign death certificates accepted. The circular now requires processing entities to accept a certified true copy of the foreign proof of death if it is certified in the country of issue through any one of several modes. These include certification by a court, magistrate, judge or notary in that country, consularisation by the Indian Embassy or Consulate General, an apostille under the Hague Apostille Convention, certification by authorised officials of overseas branches of Scheduled Commercial Banks registered in India, or certification by authorised officials of overseas banks with which Indian banks have a correspondent banking relationship.
Where the certificate is not in English, the claimant must also provide a self-certified English translation along with the certified copy of the original. The inclusion of bank branches as certifying authorities is especially practical, because it gives families a route that does not depend on embassy appointments.
Standard Procedure, Timelines and Accountability of Processing Entities
The procedural part of the circular is aimed at ending the practice of asking for documents one at a time. Processing entities must use the standard forms set out in Annexures 2 to 5, and must make them available both in physical form and on their websites, along with a list of required documents and the procedure for different scenarios. When a claim is received, the entity must acknowledge it and, in the same acknowledgement, tell the claimant about any missing, incomplete or incorrect documents. Once everything has been received, it must confirm in writing that the file is complete. Entities may also offer online submission with tracking of the claim status, although the claimant may still have to present originals in person where verification requires it.
A transmission claim must be processed within 21 calendar days from the date all required documents are received, or within any other period SEBI may specify. If the claim is delayed or rejected, the reasons must be given to the claimant in writing. Where the delay is attributable to the processing entity, SEBI may take action under the relevant Acts, regulations and circulars. Any departure from the SEBI procedure must also be communicated with written reasons.
For physical securities, the original certificate is required, except in cases of duplicate-cum-transmission. After verification, the processing entity must initiate a demat conversion so that the securities are credited directly to the claimant’s demat account, and must inform the claimant once this is done. If the securities are subject to lock-in, the RTA must inform the depository of the lock-in and its period. The RTA then retains and defaces the physical certificate with the stamp “Securities issued in dematerialised form”. The same approach must be followed when transmitting securities that have been transferred to the Investor Education and Protection Fund.
Transitional Provisions and Monitoring by SEBI
For transmission requests received before the framework took effect, processing entities have been asked to try to apply the new procedure so that claimants still get its benefit. Where a claimant has already submitted documents in the old format, the entity cannot insist on fresh submission in the new format.
SEBI will also watch the rollout closely. For six months, processing entities must send monthly reports to SEBI at rta@sebi.gov.in, setting out for each category (QTP, simplified and above threshold) the number of cases pending at the start of the month, received, approved and rejected, the number of cases where additional documents were sought along with the reasons, and the number pending at the end of the month. This reporting will show whether entities are actually following the timelines and whether the discretion to call for extra documents is being used fairly.
Conclusion
SEBI’s July 2026 circular changes the transmission of securities from a process shaped by each RTA’s own practices into a uniform and predictable one. Quick Transmission Processing gives immediate relatives a plain-paper route for small holdings, the higher simplified thresholds bring most retail portfolios within reach without court documents, and the removal of mandatory probate eases the burden on families relying on a Will.
The clear statement that nominees hold as trustees for legal heirs, the documentation-free survivorship rule for joint holders, and the 21-day deadline backed by SEBI enforcement together give claimants certainty they did not have before. At the same time, the framework protects processing entities through indemnities, sworn declarations and the express exclusion of disputed claims, which leaves contested succession matters to the courts where they belong.
SEBI’s evolving regulatory framework also addresses intermediary obligations, as outlined in the SEBI Master Circular 2026: Merchant Bankers Compliance.
