The Securities and Exchange Board of India (SEBI) has announced an extension of the nomination deadline for mutual fund unit holders from March 31, 2023, to September 30, 2023.
In June 2022, SEBI released a circular requiring mutual fund investors to nominate a beneficiary or opt-out of it by submitting a no-nomination form. The rule became effective for new investors in August 2022, and existing investors were given until March 31, 2023, to update their nomination details or opt-out.
Investors who do not provide a nominee or no-nomination form by September 30, 2023, will have their folios frozen, which will prevent them from redeeming or withdrawing from their investment until they provide the necessary details. Click here to know how to add/update a nominee for your mutual funds.
According to SEBI's circular, asset management companies (AMCs) and registrar and transfer agents (RTAs) are required to encourage unit holders to fulfil the nomination/opt-out requirement by sending emails and SMS messages on a fortnightly basis to all non-compliant unit holders. These communications should include guidance on how to nominate or opt-out of nomination.
Nomination is a crucial facility for every investor that ensures smooth transmission of mutual fund units in the absence of the investor.
This extension serves as a timely reminder to investors who have not yet submitted their details to complete the nomination process as soon as possible. Investors do not need to wait until the next deadline to complete the process.
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