On October 3, 2023, SEBI introduced a centralized mechanism to smoothen the
transmission process on death of an investor. The system provides a process for reporting and verification of death and plans to solve the problems faced by the investor’s family for transmission of the securities.
The transmission in the securities market will be processed by following 5 step process below:
1. Notifier to Submit Death certificate, PAN, Relationship details
For transmission of the securities, a notifier (joint holder, nominee or any legal representative) will submit the PAN and death certificate of the deceased investor as well as his/her PAN, relation and contact details to an intermediary. The intermediary can be a broker, RIA, distributor or KRA (KYC Registration Agency).
2. Verification by the Intermediary
The intermediary will verify the death certificate and PAN either online through website of
the issuing government authority or offline by comparing with the original documents by next working day of the receipt of documents.
On the same day of verification, 'KYC modification request' is submitted to the KRA informing that “information on death of investor received; death certificate verified” and relevant documents are uploaded. Also, all debit transactions in the account / folios of the deceased investor are blocked.
3. Permanent Block of KYC:
By next working day, the KRA will independently validate and verify death certificate and if documents are found in order, KRA will update the KYC status as “Blocked Permanently”. Once the KYC is modified, the intimation will be sent to all linked intermediaries, which in turn will block all debit transactions in the account / folios of the deceased investor.
If the investment is in 'either or survivor' or 'anyone or survivor' mode, it will continue to be active otherwise all debit transactions will be blocked.
4. Intermediary to intimate the Notifier with transmission process and documents
The related intermediaries will intimate the notifier / nominee/ joint holder about the procedure for transmission within 5 days and provide the transmission request form and the list of documents required for the transmission.
5. Submission of documents and processing of Transmission:
The notifier or nominee will complete the required forms, submit the documents as required for the transmission to the respective intermediary and the intermediary will process the transmission.
Also, the intermediaries, who have account or folios of investors whose status has been updated as deceased by the KRA, are required to submit the data and outcome of transmission to SEBI in the prescribed format.
The mechanism will be effective from January 1, 2024.
This is a welcome step by SEBI to streamline the transmission of investments of the deceased person. It will significantly save a lot of time and also reduce the hardship faced by the family members who have lost their dear one to run from pillar to post just to get the money or investments that are already theirs.
Also, now, the nominee or family members will not be able to maintain partial investments in the name of deceased person while completing transmission process for other investments.
