The investor will have to declare a nominee. This cannot be done by the investor’s power of attorney holders.
The Securities and Exchange Board of India (SEBI), a regulatory body, has made major changes in the rules related to nominees of mutual funds and demat accounts. The aim is to reduce the number of unclaimed assets and promote better management of investments. These will be useful in case of death or illness of the investor. SEBI has said that an investor can now appoint a maximum of 10 persons as nominees in demat accounts or mutual fund portfolios. This rule will be applicable from March 1, 2025. Let’s know more about this.
What is the rule?
According to a report by CNBC, the investor will have to declare a nominee. This cannot be done by the investor’s power of attorney holders. Nominees can either remain joint account holders with other nominees or open separate single accounts or folios for their respective shares.
What documents are required to transfer assets to a nominee?
- Self-attested copy of death certificate of deceased investor
- KYC of nominee must be complete, updated and re-verified.
- Due discharge of creditors
Details to be provided by investors
According to the new guidelines, investors will now have to provide more information about their nominees. This includes identifying details. For example, the nominee’s PAN, driving license number or the last four digits of his Aadhaar number. Apart from this, investors will have to provide the contact details of the nominee and how they are related to you.
How to update nominee?
The nomination form can be submitted both online and offline. For online submission, institutions will accept nominations submitted through digital signature certificate or Aadhaar based electronic signatures. Apart from this, investors will get a receipt after submitting each nomination. This will ensure transparency in the entire process. Regulated institutions are required to maintain records of nominees and receipts for a period of eight years after the transfer of an account or folio.
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