Mutual Funds Nomination
: The Securities and Exchange Board of India (
SEBI
), which oversees the capital markets, announced that you no longer have to name a nominee for joint mutual fund accounts. This change was made in a circular issued on April 30, 2024.
Deadline for nomination or opt-out
As per an ET report, currently, all individual mutual fund unit holders—whether holding units alone or with others—must nominate someone or opt out of the nomination process by June 30, 2024.
If not, their folios will be blocked from any transactions.
How to nominate
Mutual fund
holders must give their nomination details in a specific format or opt out by filling out a set declaration form. If they don’t complete this by June 30, 2024, their folios or demat accounts will be frozen.
ALSO READ | Mutual Fund KYC issues: What problems are MF investors facing with new rules and how they can check their KYC status
SEBI’s circular
The SEBI circular states that the requirement for nomination in clause 17.16 of the Master Circular for Mutual Funds is now optional for jointly held mutual fund folios.
However, all other rules regarding nomination in the Master Circular from May 19, 2023, and the SEBI Circular from December 27, 2023, remain unchanged.
SEBI has mentioned that a working group was formed to review mutual fund regulations and suggest ways to make business easier. As a result, several changes were made.
A public consultation was held based on the working group’s report, which recommended allowing fund houses to appoint a single fund manager to oversee both international and commodities investments and to make nominations for joint mutual fund accounts optional.
Adding a nominee to your demat account
To nominate or opt-out in your demat account, follow these steps:
1. Visit the website: Go to the [NSDL](http://nsdl.co.in/dpmplus.php) website.
2. Subscribe to the service: Enter your DP ID, Client ID, PAN, and verify with an OTP.
3. Choose your preference: After successful authentication, choose whether you want to nominate or opt out. Click on ‘I wish to Nominate’ if you want to add a nominee, or ‘Opt-out’ if you don’t want to nominate anyone.
ALSO READ | New mutual fund KYC rules: Is your KYC validated, verified, registered or on hold? Find out
4. Nominate details: If you opt to nominate, provide the details of your nominee(s), then click ‘Save & Next’.
5. Verify with OTP: Confirm and verify your choice through OTP authentication.
6. Complete Aadhaar e-sign: After the OTP verification, you’ll be redirected to
Protean eGov
(formerly NSDL eGov) to complete the
Aadhaar e-Sign
process.
7. Final confirmation: Once the Aadhaar e-Sign is completed and the OTP is submitted, you will see a final confirmation message.
As mentioned on the CAMS website, if you don’t register the required nomination details by the specified deadline, you won’t be able to perform certain transactions, like redemptions, Systematic Withdrawal Plans (SWP), switches, or Systematic Transfer Plans (STP) in the relevant folios from July 1, 2024.
