SEBI notified new rules related to nomination in Demat and Mutual fund accounts. Check Details

SEBI has notified new rules related to nomination in demat and mutual fund accounts and other securities matters. Under this, now if the investor is unable or incapacitated, the nominee will be able to take financial decisions on his behalf.

He will get full authority to operate demat and mutual fund accounts. The new rules have come into effect from November 28.

For this, SEBI has amended the ‘Depository and Participants’ regulations. It has been provided that if an investor or shareholder or property owner becomes incapable of taking decisions, then the nominee can take decisions in his place. Some security conditions have also been fixed for this.

Apart from this, the process of transferring property to nominees has also been simplified so that minimum paperwork is required. The new rules are aimed at making things easier for investors and applying a uniform standard for ‘nomination’ facilities in the Indian securities market.

Investors will get this option

1. It will be mandatory for every participant or investor to nominate a person as a beneficiary to whom his securities will be transferred after his death.

Authorised to transact on his behalf in case of the investor’s incapacity.

3. If there are more than one nominees, the investor can Authorise any one of them to transact on his behalf.

Nominees will be able to take decisions here: Demat accounts, mutual funds, ETFs and bond schemes and other securities

Security measures were also taken

As per the new rules, whenever an investment is transferred to the nominees, they will act as trustees for the legal heirs of the investor. The nominees will have to provide documents like PAN, passport number or Aadhaar.

Cases of joint ownership

In cases of joint ownership, the owners may collectively nominate a person who will be entitled to the securities after the death of all the joint participants. Further, the depository and the participants will not be held liable for any action taken on the basis of a nomination provided by the concerned individual.

Relief has been received here too

1. Investors are allowed to nominate up to 10 persons in demat accounts and mutual funds. Earlier this number was limited to three.

2. Nominees can be changed as many times as desired. Additionally, if a minor has been nominated, there will also be an option to declare a guardian for him.

3. Facility will also be available to operate trading accounts of family members from a single mobile number. Till now only one account can be operated from one number.

4. SEBI has urged all existing investors and unit holders to nominate for securities transfer.

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