SEBI Revises Rules to Simplify Duplicate Securities Issuance, BSDA Norms

Moneylife Digital Team 26 December 2025

Investor Interest

In a move aimed at easing investor compliance and streamlining market processes, market regulator Securities and Exchange Board of India (SEBI) has announced a set of reforms covering the issuance of duplicate securities and the basic services demat account (BSDA) framework.

To make the process of issuing duplicate securities faster, more efficient and investor-friendly, SEBI has doubled the monetary threshold for the simplified documentation process to ₹10 lakh from the earlier ₹5 lakh. Under the revised norms, investors holding securities valued up to ₹10 lakh will now be required to submit fewer documents, addressing inconsistencies and reducing procedural hurdles.

SEBI has also relaxed BSDA norms by excluding zero-coupon zero principal (ZCZP) bonds and delisted securities from the valuation threshold used to determine BSDA eligibility. The regulator says this step is intended to further enhance the BSDA facility, make investing simpler for investors and reduce the compliance burden for depository participants

BSDA was introduced to promote wider participation in the securities market by offering a low-cost demat account option for investors with relatively small holdings. Over time, however, SEBI observed that certain categories of securities were distorting the eligibility threshold, resulting in situations where investors were forced into regular demat accounts despite holding assets of limited economic value.

The new changes by SEBI ensure that investors are not denied BSDA benefits due to securities that do not reflect active or realisable market value.

SEBI has also clarified the valuation norms applicable to illiquid securities for the purpose of calculating the BSDA threshold. Illiquid securities will now be valued at their last closing price while determining eligibility.

More broadly, the value of holdings will be determined based on daily closing prices or net asset values, as applicable. Where such prices are not available, the last-traded price (LTP) may be considered, and in the case of unlisted securities other than mutual fund units, the face value may be used.

Importantly, the value of suspended securities, delisted securities, and ZCZP bonds will not be taken into account when determining whether a demat account qualifies as a BSDA.

Another key change introduced by SEBI is the requirement for depository participants to reassess BSDA eligibility on a quarterly basis. At the end of every quarter, depository participants (DPs) must review all demat accounts and convert those that meet the BSDA eligibility criteria into BSDAs, unless the beneficial owner explicitly provides consent through an authenticated and verifiable channel specified by the depositories to continue with a regular demat account, the market regulator says.

SEBI has further made active consent mandatory for opening or continuing a regular demat account where the investor is eligible for a BSDA. Going forward, DPs are required to open only a BSDA for eligible investors unless the beneficial owner specifically opts for a regular demat account by providing explicit and verifiable consent.

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