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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Centralized mechanism for reporting the demise of an investor through KRAs

03-Oct-2023 | SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/0000000163

SEBI has issued a Circular regarding Centralized mechanism for reporting the demise of an investor through KRAs, effective from 1st January 2024.

The key highlights of the Circular are:

1. SEBI has introduced a centralized mechanism to streamline the reporting and verification process in the event of an investor's demise. This initiative aims to facilitate smoother transmission in the securities market. The circular outlines operational norms and lays down obligations for regulated entities, including registered intermediaries, that engage with 'investors' or 'account holders' (used interchangeably) who are natural persons.

2. Listed companies seeking to extend the benefits of this centralized mechanism to their investors holding securities in physical form can establish connectivity with KRAs through their RTAs (Registrar and Transfer Agents). This facility is accessible to investors holding securities in physical form only if their PAN information is available in the folio. However, investors of listed companies that have not opted for KRA connectivity can still benefit from this circular by converting their securities to demat form.

3. Upon verification of the death certificate, the concerned intermediary is required to take the following actions on the same day:

a. Submit a 'KYC modification request' to the KRA, indicating "information on death of investor received; death certificate verified." Additionally, relevant documents should be uploaded.

b. Block all debit transactions in the account/folios of the deceased investor.

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