• Source:JND
Add as a preferred

SEBI: The Capital Markets Regulator 'SEBI' has made some changes in the nomination regulations for mutual funds (MFs) and demat accounts as it allowed holders to include up to 10 nominees for both instruments. The Securities and Exchange Board of India (SEBI) decided in its board meeting on September 30. The new regulations allow nominees to take action on behalf of investors who are facing some issues. The newly introduced regulations will also streamline the procedure for transferring assets to nominees with minimal documentation.

SEBI said it would also simplify the transition process for joint holders with minimal documentation. The unique identifier that must be obtained for the nominees will be PAN, passport number, or Aadhaar.

Also Read: IPOs Worth Rs 8,000 Crore To Hit Stock Market Soon; Over 12 Companies To Float Share Sale In Next Two Months

The nominees to whom the investments are remitted will act as trustees for the investor’s legal successors. Survivorship regulations will apply to joint holdings. In a Hindu undivided family (HUF), certain norms will be laid down for conducting accounts in the event of the death of the Karta.

No rights will be conferred on the legal heirs of the deceased nominee and the claims of creditors will take precedence over the transfer of property to the nominees if previously mortgaged. Nomination for joint demat accounts and jointly held mutual fund folios will be optional and for single accounts, appropriate confirmation will be required as specified for opt-out. 

Nominations will be acknowledged and records will be maintained. An investor may change nominees more than once because there will be no restriction on the number of times a nominee can be changed. Nomination details will be circulated with investors and the allocation of assets to surviving nominees will also be ascertained. Moreover, the option to specify a parent will also be available for undera nominees.

In an earlier circular, to simplify compliance for stock and mutual fund investors, SEBI had announced that demat accounts and mutual fund folios would no longer be frozen for non-submission of nominations.

Also Read: GST Collection Growth Slows In September, Govt Collected Rs 1.73 Lakh Crore