Update your nominee or get frozen out

Securities and Exchange Board of India's (SEBI) recent consultation paper on nominations has revealed some shocking facts. A startling 73 per cent of individually-held demat accounts either lack a nominee or have consciously opted out from choosing one. Though not as bad, 14 per cent of individually-held mutual fund investments also lack a designated nominee. In the case of jointly-held investments, this number stands at 34 per cent for mutual funds and 37 per cent for demat accounts. Why you must have a nominee Having a designated nominee enables passing the investments to loved ones in case of your absence. Because if you don't, its absence can throw the beneficiaries in a vortex of legal formalities before they can claim the money. Even worse, the money may remain unclaimed in some cases. Considering its importance, the SEBI in July 2021 published a circular asking demat or trading account holders to either nominate a beneficiary or opt out of it by filling up a declaration form. A similar circular was released for mutual fund investors in June 2022. While the initial deadline was set at March 31, 2022 for demat accounts and March 31, 2023 for mutual funds, it has been extended multiple times. Currently, it is June 30, 2024. Failing which, your investment folios an

This article was originally published on February 14, 2024.