No freezing of mutual funds and demat accounts for not adding a nominee

Previously, the market regulator had set the deadline to complete the nomination process by June 30, 2024

No freezing of mutual funds and demat accounts for not adding a nomineeAI-generated image

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The Securities and Exchange Board of India (SEBI) announced on Monday that failing to submit nominations will not result in the freezing of demat and mutual fund accounts.

Previously, SEBI had set a deadline of June 30, 2024, requiring existing investors and unitholders to submit their choice of nomination-either designate a nominee or opt for no nomination-beyond which, accounts were to be frozen for withdrawals. However, this deadline has been extended multiple times in the past.

That said, SEBI clarified that henceforth, all new investors and unitholders must mandatorily provide their choice of nomination for demat and mutual fund accounts.

Additionally, SEBI has mandated the AMCs, including mutual fund registrar and transfer agents (RTAs), that by October 1, 2024, investors should see a popup encouraging them to provide their choice of nomination when logging into their mutual fund accounts via the web or mobile applications. It also stated that security holders holding securities in physical form should be eligible for receipt of any payment, including dividend, interest, or redemption payment, as well as to lodge grievances or avail of any service request from the RTA even if these security holders do not submit a choice of nomination.

Assigning a nominee is important

Regardless of SEBI's updates on deadlines, designating a nominee remains crucial. Adding a nominee ensures your investments pass smoothly to your loved ones in your absence. Without a nominee, beneficiaries may face legal hurdles to claim the money. In some cases, the funds may remain unclaimed.

So,update your nominee details and secure your investments for the future.

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