SEBI scraps Letter of Confirmation, mandates direct credit of securities to demat accounts

The Securities and Exchange Board of India on Friday issued a circular aimed at easing investing and doing business by doing away with the requirement of issuing a Letter of Confirmation for credit of securities to investors demat accounts.

Under the revised framework, listed companies and Registrars to an Issue and Share Transfer Agents will directly credit securities to investors dematerialisation accounts after completing the necessary due diligence. The move applies to investor service requests such as issuance of duplicate share certificates, transmission, transposition, claims from unclaimed suspense accounts and corporate actions.

Currently, investors are required to submit a Letter of Confirmation issued by companies or RTAs to their depository participant, a process that typically takes around 150 days. SEBI said the new system is expected to cut the timeline for credit of securities to about 30 days, while also reducing risks linked to loss or misuse of such letters.

The provisions of the circular will come into force from 2 April 2026. Letters of Confirmation issued before this date will continue to remain valid for dematerialisation within the prescribed timeline.

SEBI said the initiative is intended to improve ease of doing investment, enhance operational efficiency and strengthen investor protection.

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