In a major regulatory update, the Securities and Exchange Board of India (SEBI) has introduced revised nomination guidelines for demat accounts and mutual funds. Effective from March 1, 2025, the changes aim to streamline asset transmission and reduce unclaimed investments.
As per Siba Sanyena, from AssetPlus, commends SEBI’s proactive approach
“SEBI’s latest move ensures greater transparency and efficiency in asset transmission. Allowing up to ten nominees offers flexibility in wealth distribution, making it easier for investors to align asset inheritance with their personal and financial circumstances. Moreover, requiring direct investor involvement in the nomination process ensures that the investor’s wishes are truly honored. These changes not only safeguard investor interests but also minimize disputes and legal complexities.”
Key Highlights of the New Regulations
Multiple Nominees: Investors can now designate up to ten nominees for their mutual fund and demat accounts, ensuring better estate planning.
Mandatory Nominee Details: Investors must provide PAN or Aadhaar details for each nominee to authenticate and validate the nomination process.
Direct Investor Participation: Only account holders can appoint nominees—Power of Attorney (PoA) holders are restricted from making nominations.
Simplified Transmission Process: In case of the investor’s demise, nominees can claim assets by submitting a self-attested death certificate and updated KYC details, reducing bureaucratic delays.
Nominee Flexibility: Post-transmission, nominees can manage investments jointly or split them into individual accounts, as per their preference.
Provisions for Incapacitated Investors: Nominees can act on behalf of an incapacitated investor with verified approval, ensuring continued financial management.
Secure Withdrawals: To prevent unauthorized transactions, any withdrawals by nominees will be credited only to the verified bank account of the deceased investor.
Encouragement for Existing Investors: SEBI urges investors to update their nomination details to prevent investments from becoming unclaimed assets.
Conclusion
These new guidelines reflect SEBI’s commitment to investor protection and financial security. Investors should take proactive steps to update their nomination details, ensuring a smooth transition of assets in unforeseen circumstances. With expert-backed policies, SEBI is setting a strong precedent for investor-friendly regulations in India’s financial ecosystem.
