Mutual fund nominee: Nomination in mutual fund is almost a must | Value Research While SEBI has provided fund investors an option to nominate or opt-out of nomination, having a nominee in mutual funds is highly desirable

Mandatory or not, nomination is almost a must

While SEBI has provided fund investors an option to nominate or opt-out of nomination, having a nominee is highly desirable

SEBI has recently come out with a circular providing mutual fund investors with a choice to either provide nomination under their investments or opt-out of nomination altogether by signing a declaration form. While this will apply to investors subscribing to mutual funds from August this year, SEBI has given time till March 31, 2023 to AMCs to get the nomination details or the 'no-nominee' declaration from their existing investors as well. So, the rules will even apply retrospectively. Further, investments either without any nominees or without a 'no-nominee' declaration will be frozen.

Nomination, in our opinion, is a very useful facility, so much so that one should consider it almost as a mandatory process. Not having nominations can push your beneficiaries in a loop of legal formalities before they can even claim the money in your absence. Thus, having a nominee greatly eases transmission. We highly recommend you to make use of this facility and put your nominations in place if they aren't already and do it prospectively as well.

In case you don't have nominations in your existing investments or you are unsure of whether your investments already have a nominee tagged or not, then it is likely that the AMCs will reach out to you. But you really don't have to wait for the AMCs to approach you, you can simply go to MFCentral where you can view and update/add nominees in your folios. For a step-by-step guide, you can refer to this story that we did a few months back.

Remember, it is extremely important that your hard-earned money reach the rightful claimants just in case something happens to you. So, don't think of nomination as a trivial thing, rather you must act on it.

Suggested watch: Claiming money after the death of a mutual fund investor

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