The Securities and Exchange Board of India (SEBI) has formally done away with the requirement of issuing a Letter of Confirmation (LoC) for certain investor service requests, vide Circular dated 30/01/2026. Under the revised framework, securities will now be credited directly to the investor’s demat account after due verification.
This move is part of SEBI’s ongoing effort to improve ease of doing investment and ease of doing business by reducing procedural steps, timelines, and operational risks.
What Exactly Has SEBI Changed?
Earlier, investor service requests such as transmission, issuance of duplicate certificates, or claims from unclaimed suspense accounts required the issuance of a Letter of Confirmation before securities could be dematerialised.
SEBI has now removed this intermediate step. Registrars and Transfer Agents (RTAs) or issuer companies can directly credit securities in dematerialised form to the investor’s demat account, subject to prescribed checks.
Direct Credit of Securities to Demat Accounts
Under the revised process, the RTA or issuer company must verify and process the investor service request and then issue the securities directly in dematerialised form to the demat account of the securities holder or claimant.
This direct credit must be completed within 30 days from the date of receipt of a valid service request, after removal of any objections.
Client Master List Requirement Continues
Although the Letter of Confirmation has been dispensed with, SEBI has retained the requirement for demat account verification. Every investor service request must be accompanied by a copy of the latest Client Master List of the demat account.
The Client Master List must not be older than two months and must be duly attested by the Depository Participant. This ensures that securities are credited only to verified and correct demat accounts.
Initiation of Demat Conversion Request
After verification of the service request and supporting documents, the RTA or issuer company is required to initiate the dematerialisation or demat conversion request in the depository system.
This system-driven step enables the direct credit of securities into the demat account without the need for issuing a Letter of Confirmation.
Intimation After Successful Dematerialisation
Once the demat conversion request is confirmed, the depositories, RTAs, or listed companies, as applicable, must send an intimation to the securities holder or claimant.
This intimation serves as confirmation that the securities have been successfully dematerialised and credited to the demat account.
Effective Date of the SEBI Circular
The circular will come into force with effect from April 2, 2026. All RTAs, issuer companies, depositories, and market participants must align their internal processes with the revised framework from this date.
Letters of Confirmation issued prior to April 2, 2026 may still be used for dematerialisation within the timelines specified by SEBI.
Key Takeaway
By eliminating the Letter of Confirmation and allowing direct demat credit, SEBI has simplified investor servicing while maintaining essential verification safeguards. The revised framework reduces turnaround time, lowers operational risk, and enhances efficiency for both investors and intermediaries.
SEBI Circular dated 30/01/2026: Letter of Confirmation Discontinued for Direct Demat Credit