The Securities and Exchange Board of India (SEBI) announced new rules for the nomination process in demat and mutual fund accounts on September 30, 2024. Investors can now nominate up to 10 individuals, and unique identifiers like PAN, Passport number, or Aadhar must be provided for each nominee.
SEBI also clarified that minimal documentation will be required for asset transmission to joint holders. In joint holdings, the rule of survivorship will apply, and nominees will serve as trustees for legal heirs, with creditors’ claims taking priority over asset transmission.
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For joint demat accounts and mutual fund folios, the nomination process is optional, whereas singly held accounts require confirmations to opt out. Investors have the flexibility to change nominees without any limit on the number of updates.
Additionally, SEBI provided clarity on the transmission process for Hindu Undivided Family (HUF) accounts after the death of the Karta. This includes clear guidelines to prevent asset freezing due to the absence of a nomination choice.
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These changes aim to streamline the process, ensuring ease of transmission, and reducing unclaimed assets in the securities market, thereby enhancing the efficiency and accessibility of asset management for investors and their families.
