04-Oct-2023
2 mins read
SEBI, the market regulator, has unveiled plans to implement a centralised system for reporting and verifying the death of investors. This initiative aims to simplify the process of transferring assets within the securities market. This circular will be effective from January 1, 2024.
Additionally, the circular allows stock exchanges, depositories, and associations such as AMFI (Association of Mutual Funds in India) and Registrars Association to establish a shared Standard Operating Procedure (SOP) and inform investors about these changes.
Operational Guidelines
SEBI’s circular outlines operational guidelines for registered intermediaries interacting with investors or account holders. When an intermediary receives information about an investor’s demise, it must follow these steps:
- Authenticate the death certificate using either online or offline methods.
- Record a copy of the evidence of identity, the relationship with the deceased, and the details of the notifier.
If obtaining the death certificate immediately is not feasible, the investor’s Know Your Customer (KYC) status will be temporarily marked as “On Hold” until the document is provided. Once the death certificate is verified, the KYC Registration Agency (KRA) will update the investor’s status to “information on the death of the investor received; death certificate verified.”
Key Points to Keep In Mind
It’s important to note that after the KYC status updates, all debit transactions in the deceased investor’s account/folios will be suspended. However, if the account is jointly held or operated in an “Either OR Survivor” mode, account operations will continue without interruption.