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SEBI New Guidelines: The Securities and Exchange Board of India (SEBI) has made major changes in the rules related to nomination in mutual funds and demat accounts. Under this, an investor can now make a maximum of 10 persons as nominee in his demat account or mutual fund folio. This new rule will be effective from March 1, 2025.
This is mentioned in the new guidelines of SEBI
The purpose of this change by SEBI is to reduce unclaimed assets and ensure better management of investments. Many times, in case of death of the investor or serious illness, either disputes among the family members regarding the investment increase or no one claims the amount at all. To resolve this, SEBI has taken this step.
However, for this it will be necessary to provide complete details of the nominee such as phone number, email, address, Aadhaar number, PAN number, driving license number etc. Overall, all the details related to the personal information of the nominee will have to be given. You will also have to mention your relationship with the nominee. SEBI has also said that the investor’s power of attorney (POA) will not have the right to declare the nominee.
Along with this, according to the new rules issued for the nominee, the person nominated in the mutual fund and demat account can either remain a joint holder with other nominees or can create a separate folio or single account for his/her respective share. Along with this, these documents will be required to transfer assets to the registered nominee.
- Self-attested copy of the death certificate of the deceased investor
- KYC of the nominee should be completed properly
- Due discharge from creditors
SEBI has ordered regulated entities like mutual fund houses and depositories to give investors the option to submit nomination forms both online and offline. Along with this, the investor will get an acknowledgment on every nominee submission, due to which transparency will be maintained in this entire process. Additionally, regulated entities will have to maintain records of nominees and acknowledgments for eight years after transfer of the account or folio.
This is the rule for physically disabled investors
Under the new guidelines of SEBI, if the investor is physically disabled, then the mutual fund or broker will have to give the option of handling the account to one of the nominees made by him. Not only this, if investors wish, they will also be able to select a specific percentage and overall value of the assets in their account/folio for such nominee.
In this situation, it will be necessary for the Asset Management Companies (AMCs) to take the approval of the physically disabled person in person. The most important thing is that the funds withdrawn can be transferred only to the investor’s registered bank account. In this, no changes can be made in the already given contact details or linked account.
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