- Investors can now nominate up to 10 individuals for mutual funds or demat accounts.
- Nominations must be made personally; Power of Attorney holders cannot handle this task.
- Nominees need to provide essential identification details like PAN or Aadhaar.
- SEBI aims to reduce unclaimed assets and simplify the process for transferring assets in case of illness or death.
- Both online and offline options are available for filing nominations.
Starting March 1, 2025, the Securities and Exchange Board of India (SEBI) will enforce updated rules for mutual fund and demat account nominations. These rules are designed to reduce unclaimed investments and make managing assets smoother in case of illness or death of an investor.
Under the new guidelines, investors can now nominate up to 10 individuals for their mutual fund or demat accounts. Importantly, this nomination must be done personally by the investor—Power of Attorney (PoA) holders are not allowed to do it on their behalf.
Nominees are required to provide identification details such as PAN, Aadhaar (last four digits), or their driving license number. They can either hold joint accounts with other nominees or opt for individual accounts for their share of the assets.
Simplified Rules for Mutual Fund Nomination
| Feature | Details |
|---|---|
| Effective Date | March 1, 2025 |
| Maximum Nominees Allowed | Up to 10 per mutual fund or demat account. |
| Who Can Nominate? | Only the investor can nominate; PoA holders are not permitted. |
| Nominee Details Required | PAN, Aadhaar (last 4 digits), or driving license number. |
| Nominee Account Options | Joint accounts with other nominees or individual accounts for each nominee’s share. |
| Submission Options | Online (with Aadhaar e-signatures or digital signatures) and offline methods available. |
| Record Retention | Entities must keep nomination records for 8 years after the account is transferred. |
What Happens in Case of Investor’s Death?
If an investor passes away, SEBI has simplified the process to transfer assets to the nominees.
Documents Required for Asset Transmission:
- Self-attested copy of the death certificate.
- Updated KYC details of the nominee(s).
- Discharge from creditors, if applicable.
Nominees also have the flexibility to either manage the portfolio jointly with other nominees or split it into individual accounts.
Support for Incapacitated Investors
SEBI has introduced measures for investors who may become incapacitated due to health reasons. Nominees can manage their investments but must provide an in-person approval using a thumbprint or other authenticated marks. Additionally, withdrawals are only allowed to the investor’s verified bank account to ensure safety.
To further assist, SEBI has directed mutual fund companies and depositories to create a Standard Operating Procedure (SOP) for these situations.
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