Market regulator SEBI said in a circular issued on June 10 that it will not seize the mutual fund portfolios or demat accounts of those investors who have not provided information related to their nominees.
There is a relief news for mutual fund investors and demat account holders. The Securities and Exchange Board of India (SEBI) said in a circular issued on June 10 that it will not freeze the mutual fund portfolio or demat accounts of those investors who have not provided information related to their nominees.
Apart from this, investors holding securities in physical form will now be eligible to receive any payment such as dividend, interest or redemption of securities. Along with this, investors will be entitled to file a complaint or request any service from the Registrar and Transfer Agent (RTA) even if they do not choose the ‘nomination option’.
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Earlier, SEBI had set a deadline of June 30 for all existing individual mutual fund holders to provide nominee details or opt out of nomination. Non-compliance with the rule could have resulted in a ban on withdrawals from their accounts. However, SEBI said in a circular issued on Monday that keeping in mind the ease of compliance and convenience of investors, it has been decided not to ban mutual fund accounts with demat accounts for not providing ‘nomination option’ for existing investors or unit holders.
The system will continue for new investors.
The market regulator said that payments that were currently stopped due to listed companies or RTAs not providing the ‘nomination option’ can now be settled. Along with this, SEBI clarified that the system of mandatorily providing the ‘nomination option’ for demat account/mutual fund folio to all new investors and mutual fund unit holders will continue.
SEBI issued format
The regulator has asked the depository participant, AMC or RTA to encourage demat account holders or mutual fund unit holders to update the ‘nomination option’ by sending messages on a fortnightly basis through email and SMS. To update the regulator, the name of the nominee, the nominee’s shareholding and relationship with the applicant will have to be disclosed. SEBI has also issued a format for providing the option of nomination and exit from nomination in demat accounts and MF folios.
