Sebi removes the requirement of confirmation letter and allows direct crediting of securities to demat accounts

The Securities and Exchange Board of India (SEBI) on Friday said it has done away with the requirement of issuing a confirmation letter for crediting securities and will allow direct crediting of securities to investors’ demat accounts.In a circular issued on January 30, Sebi said the move is aimed at simplifying and streamlining the credit process of securities arising out of investor requests such as issuance of duplicate share certificates, transmission, conversion, claims of unclaimed suspense accounts and corporate actions.

Currently, listed companies, registrars and transfer agents issue a confirmation letter to investors, which is then submitted to the custodian for crediting of securities. Sebi said this process usually takes about 150 days.

Under the revised framework, listed companies, registrars and transfer agents will credit securities directly to the investor’s demat account after conducting required due diligence. Sebi said the change is expected to shorten the timeline for crediting securities from about 150 days to about 30 days.

The regulator also said the new process will reduce the risks associated with loss or misuse of the confirmation letter.

The provisions of the circular will come into effect from April 2, 2026. Sebi clarified that confirmation letters issued before this date can be used by investors for dematerialization within the prescribed timelines.

The circular has been issued as part of Sebi’s efforts to improve ease of investment and operational efficiency.