The Securities and Exchange Board of India has issued a circular removing the requirement to issue a Letter of Confirmation (LOC) and introducing a framework for direct credit of securities to investors’ dematerialisation accounts for investor service requests, including duplicate certificate issuance, transmission, transposition, claims from unclaimed suspense accounts and certain corporate actions. Under the existing process, listed companies and Registrars to an Issue and Share Transfer Agents (RTAs) issue an LOC that investors submit to their Depository Participant for credit of securities, a cycle that typically takes around 150 days. Under the revised framework, RTAs and listed companies must directly credit securities to the investor’s demat account after completing necessary due diligence, with SEBI estimating a reduction in the credit timeline to around 30 days and lower risk of loss or pilferage of LOCs. The circular takes effect from April 02, 2026. LOCs issued before that date may continue to be used for dematerialisation within the prescribed timeline.
Securities & Exchange Board of India 2026-01-30
Securities and Exchange Board of India scraps Letters of Confirmation and requires direct credit of securities to investors’ demat accounts
The Securities and Exchange Board of India has removed the requirement for a Letter of Confirmation and introduced a framework for direct credit of securities to investors' dematerialisation accounts, reducing the credit timeline from 150 to 30 days. This change, effective April 2, 2026, aims to streamline processes for investor service requests and reduce risks associated with LOCs.