Simplification of Documentation Requirement for Transmission of Securities and Revision in Threshold Limits for Simplified Documentation

When an investor passes away, their family faces two simultaneous burdens: grief, and a documentation maze. Transmission of securities — the process by which holdings are transferred to legal heirs, nominees, or successors — has long been one of the most procedurally onerous experiences in India's financial markets. Inconsistent document checklists across intermediaries, outdated monetary thresholds, mandatory probate requirements, and unresolved ambiguities around legal heirship certificates have combined to create a process that fails families at precisely the moment they are least equipped to navigate it.

SEBI's consultation paper dated 12 March 2026, proposing reforms to the documentation requirements for transmission of securities and revised threshold limits for simplified processes, is a substantive and long-overdue correction. The proposals cover amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations") and the Master Circular for Registrars to an Issue and Share Transfer Agents ("RTAs") dated 6 February 2026. The comment period closed on 2 April 2026.

What Transmission of Securities Is — and Why It Has Been So Difficult

The Legal Distinction Between Transmission and Transfer

Transmission is the process by which securities held by a deceased investor are transferred to their legal heirs, nominees, or successors. It is fundamentally different from a transfer — which is a voluntary sale or gift between living persons. Transmission is an operation of law, triggered by death, and does not involve consideration. It is governed by a separate set of rules under Schedule VII of the LODR Regulations and Para 21 of the Master Circular for RTAs.

The entities responsible for processing transmission requests include listed companies, RTAs, depositories, Depository Participants ("DPs"), and Asset Management Companies. In practice, it is the RTA or the DP that the family deals with most directly — and it is at this interface that the process has most consistently broken down.

The Problems the Existing Framework Created

The existing framework was not poorly designed in theory. SEBI had already created a tiered approach: where a nomination was registered, the process was fast; where it was not, simplified documentation applied up to a monetary threshold; above that threshold, full documentation was required.

The problem was execution. SEBI's consultation paper identifies five structural failures in the current framework:

Outdated threshold amounts: The simplified documentation threshold had been set at ₹5 lakh per listed entity for physical securities and ₹15 lakh per beneficial owner for dematerialised securities. Given the growth of Indian equity markets and the appreciation of individual portfolios over the past decade, these limits excluded a large share of ordinary retail investors from the simpler process — defeating the framework's original purpose.

Inconsistent practices across intermediaries: Listed companies, RTAs, and DPs were applying the same regulatory requirements differently. A family dealing with multiple listed entities could face multiple different document checklists. This unpredictability created significant additional burden for claimants who were already in distress.

The probate requirement: Section 213 of the Indian Succession Act, 1925, required probate of a will before any right as executor or legatee could be established in court — applicable specifically in Mumbai, Kolkata, and Chennai for certain communities including Hindus, Sikhs, Jains, and Parsis. Obtaining probate is expensive, requires engaging legal counsel, and takes months. Many intermediaries were insisting on probated wills even where the law did not strictly require it.

Deaths outside India: Getting a foreign death certificate attested and accepted in India required attestation through the Indian Embassy — a process that could be slow, expensive, and logistically complex for families managing estates across jurisdictions.

Ambiguity on Legal Heirship Certificates: No consensus existed on which authority was the "relevant authority" to issue a Legal Heirship Certificate. Families in different states received conflicting guidance from RTAs and revenue administrations.

SEBI acknowledges an underlying structural tension openly: intermediaries processing transmission requests are genuinely concerned about fraudulent claims and protracted litigation. This caution, while not unreasonable, had resulted in demands for documentation that went well beyond what the regulations required — a form of regulatory overreach by intermediaries that the standardisation proposals are specifically designed to address.

The Legislative Change That Made Reform Possible

Removal of the Mandatory Probate Requirement

One of the most impactful developments underpinning SEBI's proposal is the removal of the mandatory probate requirement under Section 213 of the Indian Succession Act, 1925, effective 20 December 2025. This legislative change eliminates the earlier requirement of obtaining probate in Mumbai, Chennai, and Kolkata for specific communities — creating a more uniform and less burdensome national framework for inheritance claims.

SEBI's proposals align directly with this legislative shift by reducing reliance on probate and allowing alternative documentation such as notarised wills and affidavits. The consultation paper's timing reflects a regulatory response to a legal landscape that has materially changed — and the two reforms together represent a coherent policy direction toward frictionless inheritance.

The Proposed Framework: A Three-Tier Structure

The Core Architecture

The proposed framework creates three clearly defined tiers based on the value of the securities being claimed, each with its own documentation requirements. The framework applies to all cases where there is no nomination or no will.

Tier 1 — Straight Through Processing for Low-Value Claims

SEBI proposes a new "Straight Through Processing" (STP) mechanism for low-value claims, allowing minimal documentation and faster settlement:

• Up to ₹10,000 for physical holdings
• Up to ₹30,000 for dematerialised holdings

This tier is particularly significant where the cost of assembling transmission documentation would exceed the value of the securities themselves — a scenario that the current framework had no mechanism to address. The STP tier ensures that small retail investors and their families are not trapped in a disproportionate documentation process.

Tier 2 — Revised Simplified Documentation Thresholds

The revised thresholds significantly expand the scope of the simplified documentation process:

Security Type	Previous Threshold	Proposed Threshold
Physical securities	₹5 lakh per listed entity	₹10 lakh per listed entity
Dematerialised securities	₹15 lakh per beneficial owner	₹30 lakh per beneficial owner

Listed entities retain discretion to extend the physical securities threshold further at their option — an important flexibility provision that allows intermediaries to adopt a more accommodating approach where their risk assessment supports it.

Tier 3 — Above-Threshold Cases: Probate Replaced with Flexible Alternatives

For claims exceeding the simplified documentation limits, the proposal removes the probated will requirement entirely and replaces it with a flexible set of alternatives. The claimant must submit the transmission request form, Client Master List ("CML"), verifiable death certificate, and valid ID — and then rely on any one of the following:

• A copy of the Succession Certificate, Letter of Administration, or Court Decree; or
• A copy of the Will as applicable under the Indian Succession Act, 1925, along with a notarised indemnity bond; or
• A Legal Heirship Certificate or equivalent, along with a notarised indemnity bond and NOC from all non-claimants

In addition, a notarised affidavit from all legal heirs asserting their identity and claim of legal ownership is required as a base document alongside any of the above options.

A practical concern worth flagging: the requirement for a notarised affidavit from all legal heirs will create difficulties where family members are in dispute with each other, or where legal heirs are located across different geographies or jurisdictions. SEBI may need to provide for an alternative pathway in such scenarios.

Standardisation of Documentation Across All Tiers

Cases with Nomination — The Fastest Track

Where a valid nomination exists, the process remains straightforward and requires only:

• Transmission request form
• Client Master List (CML)
• Verifiable death certificate
• ID proof of nominee

This reinforces SEBI's continued emphasis on encouraging nomination as the primary investor protection mechanism — and serves as a reminder to all investors to ensure their nominations are current and registered.

Cases Without Nomination — Simplified and STP Cases

For smaller claims without nomination or will, the documentation requirements are calibrated to the tier:

• Minimal documentation for STP cases
• Indemnity bonds and NOCs for non-STP simplified cases

This approach balances accessibility with the safeguards against fraudulent claims that intermediaries legitimately require.

The Revised Definition of "Verifiable Death Certificate"

One of the most practically significant changes in the consultation paper is the formal definition of "verifiable death certificate." Intermediaries rejecting copies of death certificates as inadequate had been a common source of delay and frustration. Under the proposed definition, the following all qualify:

• An original death certificate, or a copy attested by the nominee subject to verification with the original
• A copy duly attested by a notary public or gazetted officer
• A death certificate bearing a QR code enabling digital verification

For deaths outside India, the existing accepted modes — certification by a court magistrate or judge in the country of issuance, attestation by the Indian Embassy, or apostille — are supplemented with two new options: certification by authorised officials of overseas branches of scheduled commercial banks registered in India, and certification by authorised officials of any foreign bank. This significantly reduces the dependence on Indian Embassy attestation for NRI and international families.

Procedural Standardisation: Removing Intermediary Discretion That Had Been Misused

Defined Timelines and Mandatory Written Communication

The consultation paper introduces procedural standardisation across RTAs, listed companies, DPs, and AMCs to ensure consistent application of the framework:

• All transmission cases must be processed within 21 calendar days of receiving all required documents
• Any delay or rejection must be communicated to the claimant in writing, with reasons
• Deviations from SEBI's prescribed procedure must be communicated in writing — intermediaries can no longer impose additional requirements without formal explanation
• Digital submission and online tracking of claims are proposed to enhance transparency and accessibility
• Where delay is attributable to the entity itself, SEBI has reserved the right to take regulatory action

The definition of the "relevant authority" for Legal Heirship Certificates is now anchored to a revenue authority not below the rank of Tehsildar — addressing the ambiguity that had previously allowed intermediaries to reject certificates on the basis of disputed authority.

A concern on state-level implementation: The process for obtaining a Tehsildar certificate differs significantly from state to state. Without further standardisation at the state level or SEBI guidance on what constitutes acceptable compliance across jurisdictions, this definition may still result in inconsistent outcomes across India.

Regulatory Architecture: Moving Transmission Rules Out of the LODR Schedule

The Shift to Circular-Based Governance

SEBI proposes to delete Para C of Schedule VII of the LODR Regulations — which currently contains the transmission procedural requirements — and to instead issue those requirements by way of circular. Regulations 40(7) and 61(4) of the LODR Regulations and Para 21 of the Master Circular are proposed to be amended accordingly.

This shift from a scheduled regulation to a circular is administratively significant. It allows SEBI to update the transmission framework without amending the LODR Regulations each time market conditions or legal landscapes change — making future revisions faster and less procedurally burdensome. Given that this consultation paper itself is partly a response to the December 2025 legislative change to the Indian Succession Act, the ability to update the framework by circular will be valuable as the legal context continues to evolve.

Issues the Framework Does Not Yet Resolve

Disputed Claims and Post-Transmission Objections

The revised framework does not provide a standardised dispute redressal mechanism for scenarios where multiple claims arise simultaneously or where an objection is filed by another family member after transmission has been completed. This is a genuine gap — contested successions are not uncommon in practice, and the absence of a clear regulatory pathway for such disputes leaves intermediaries and claimants without guidance on how to proceed.

The All-Legal-Heirs Affidavit in Contested or Dispersed Families

As noted above, the requirement for a notarised affidavit from all legal heirs will encounter practical difficulties in cases involving family disputes or geographically dispersed heirs. A mechanism for proceeding where one or more legal heirs are unwilling or unable to provide the affidavit — such as a court-supervised process or a regulatory override in documented circumstances — would strengthen the framework's practical utility.

State-Level Variation in Tehsildar Processes

The definition of the "relevant authority" as a Tehsildar-level revenue officer is a useful clarification, but the actual process for obtaining such a certificate varies materially across states. SEBI or the Ministry of Finance may need to coordinate with state governments to ensure that the standardisation at the regulatory level translates into uniformity at the implementation level.

Legal and Practical Implications for Investors, Families, and Intermediaries

For Investors and Families

The proposed framework reduces the emotional and financial stress of the transmission process at the most difficult moments. The combination of STP for low-value claims, doubled simplified documentation thresholds, elimination of the probate requirement, and expanded options for death certificate verification collectively make the process more accessible to the retail investor base that SEBI is primarily trying to protect.

The emphasis on nomination as the fastest transmission route is also a valuable policy signal — investors who ensure their nominations are registered and current will continue to benefit from the most streamlined process available.

For Intermediaries

Standardisation reduces ambiguity around which documents can be required — but it also imposes greater accountability through defined 21-day processing timelines, mandatory written communication of any deviation, and the explicit threat of regulatory action for entity-attributable delays. Intermediaries that have been using informal documentation requirements as a risk management tool will need to align their processes with SEBI's prescribed framework.

For the AIF Industry Specifically

While the transmission framework primarily applies to listed securities processed through RTAs and DPs, the principles of simplified documentation, defined timelines, and standardised processes are directionally relevant for AIF managers handling investor succession — particularly in the context of DPDP Act compliance, investor charter obligations, and the broader investor protection framework that SEBI is building out across asset classes.

Conclusion: A Framework Built for the India of Today, Not the India of a Decade Ago

SEBI's March 2026 consultation paper on transmission of securities is a coherent, well-calibrated response to a framework that had been overtaken by market reality. India's retail investor base has grown, portfolio values have risen substantially, probate law has been reformed, and digital infrastructure has matured. The proposed reforms respond to all four of these changes:

• Straight Through Processing for low-value claims where documentation costs exceed securities value
• Doubled simplified documentation thresholds — ₹10 lakh for physical, ₹30 lakh for demat — reflecting modern portfolio values
• Elimination of the mandatory probate requirement aligned with the December 2025 legislative change
• Formal definition of "verifiable death certificate" including QR-code-enabled digital verification
• Expanded overseas death certificate options reducing dependence on Indian Embassy attestation
• 21-day processing timeline with mandatory written communication of deviations
• Circular-based governance architecture enabling faster future updates without LODR amendments

The framework's remaining gaps — dispute resolution for contested claims, the all-legal-heirs affidavit challenge in dispersed families, and state-level variation in Tehsildar processes — are real but addressable. The consultation process creates the opportunity to incorporate these refinements before the final framework is notified.

For millions of Indian families navigating the transmission process in the years ahead, the difference between the current framework and the proposed one is the difference between months of documentation burden and a process that can be completed within weeks — with clear expectations, defined timelines, and intermediaries held accountable for adherence.

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This analysis is based on the SEBI Consultation Paper dated 12 March 2026 on simplification of transmission of securities documentation and revision of threshold limits. It is intended for informational purposes only and should not be construed as legal or compliance advice. Investors, intermediaries, and fund managers should consult their legal advisors regarding the implications of the proposed framework for their specific circumstances.

Questions about investor succession processes or documentation requirements for your AIF? Contact Navigate AIF to understand how evolving SEBI frameworks on transmission, investor protection, and documentation standardisation interact with your fund's compliance obligations.

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