In a notification, the capital market regulator said investors must either choose a nominee/s or explicitly opt out of the nomination by submitting a declaration before the set deadline.
Capital markets regulator Securities and Exchange Board of India (Sebi) has once again extended the deadline for mutual fund and demat account holders to add the name of the beneficiary/beneficiaries or opt out of it till June 30, 2024. Earlier, the deadline for the same was December 31, 2023.
Earlier, Sebi had pushed the deadline from September 30 to December 31 so that MF holders could complete the nomination process.
In a notification, Sebi said investors must either choose a nominee/s or explicitly opt out of nomination by submitting a declaration before the set deadline.
“Based on representations received from the market participants, for ease of compliance and investor convenience, it has been decided to extend the last date for submission of ‘choice of nomination’ for demat accounts and mutual fund folios to June 30, 2024,” the Securities and Exchange Board of India (Sebi) said in a circular.
Further, Sebi asked asset management companies (AMCs), depository participants and Registrar and Transfer Agents (RTAs) to encourage the demat account holders and mutual fund unit holders to fulfil the requirement for nomination/opting out of the nomination by sending a communication on fortnightly basis by way of emails and SMS to all such unit holders who are not in compliance with the requirement of nomination.
Why the nomination process is crucial
The Sebi has earlier said that if MG unitholders miss the the nomination deadline, it can freeze debits from their holdings. That means investors won’t be able to access or withdraw from mutual funds accounts or use their demat accounts for trading stocks.
If one skips the nomination process, in case of any untoward incident, the investments can be easily transferred to the listed beneficiaries. In its absence, the family members of the deceased may be go through lengthy and costly legal procedures to get hold of the investments.
How to add beneficiary’s name?
To add a nominee/nominees for your Mutual Fund investments, once can take the common nomination form for mutual funds provided by the AMCs and add the required details. One can add up to three nominees.
> Name of the nominee
> Date of birth of the nominee
> Nominee’s relationship with the investor
> Address of the nominee
> Percentage share of each nominee (if there is more than 1 nominee), etc.
> In case the investor does not specify the percentage share, the Mutual Fund units will be equally distributed among all the nominees mentioned in the nomination form.
For demat accounts, NSDL is offering a facility to nominate online for your NSDL demat account, which is applicable for single demat account holder and resident individuals.
Using this facility, demat account holders can add upto three nominees in their demat accounts.
> Log in to https://eservices.nsdl.com/instademat-kyc-nomination/#/login
> Enter + + . OTP on mobile number registered in your demat account.
> Select OR .
> e-sign using AADHAAR. OTP on mobile number registered with UIDAI (AADHAAR).
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