Starting March 1, 2025, the Securities and Exchange Board of India (SEBI) will implement new nomination rules for mutual funds and demat accounts.
Here are the key updates you need to know about.
Nomination now Mandatory:
Going forward, nomination has been made mandatory for all single-holder accounts. So if you hold a mutual fund account alone, you will now be required to add a nominee. This rule intends to prevent situations where investments become unclaimed after the account holder’s death.
Changes in Number of Nominees:
Currently you can add up to 3 nominees. But 1st March, 2025 onwards you will be able to add 10 nominees for each mutual fund or demat account. It’s up to you how much each nominee gets (equal share or different percentages).
Only Account Holders Can Modify Nominee Details:
According to the new rules, PoA (Power or Attorneys) holders cannot add or update nominees. Only the investor (account holder) will be able to do so.
Easier Asset Claim Process for Nominees:
As of now, post death of an investor, nominees are required to submit multiple documents to claim investments.
March 1st onwards only two documents will be required:
- Attested copy of the death certificate
- Updated KYC (Know Your Customer) details of the nominee
No more legal affidavits, succession certificates, or excessive paperwork. This rule will help set up a streamlined process that will help families access investments smoothly.
Special Rules for Incapacitated Investors:
If an investor is unable to manage their investments due to medical reasons, nominees can step in, but with strict safeguards:
The investor’s thumbprint will be verified in person.
An independent witness must confirm the process.
Withdrawals will only be transferred to the investor’s registered bank account.
This will help safeguard investor’s wishes, reduce frauds and unauthorized access to funds.
Now what does this mean for you as an investor?
These rules aim to simplify asset transfers, reduce unclaimed investments, and provide better support for incapacitated investors.
SEBI’s new nomination rules ensures that:
You must nominate someone (mandatory for single-holder accounts).
Faster & hassle-free claim process for nominees.
Higher security to prevent misuse or fraud.
This change comes with the intent of making your investments safer and easier to pass on to your loved ones.
What happens if you don’t add a nominee?
If you fail to add a nominee, your investments could become “unclaimed assets.” This could entail a long, tedious and stressful process for your loved ones to access the money.
With these new rules:
Your loved ones will get your investments easily.
No unnecessary legal paperwork.
You stay in full control of who receives your wealth.
How to Update Your Nominee Before the Deadline?
Option 1: Online (Recommended!)
Log in to your mutual fund or demat account.
Go to the “Nomination” section.
Click “Add/Edit Nominee” and enter nominee details (PAN, Aadhaar, etc.).
Submit using Aadhaar e-signature.
Option 2: Offline (For Those Who Prefer Paper Forms)
Download the nomination form from your mutual fund provider’s website.
Fill in the nominee details and sign the form.
Attach self-attested KYC documents (like PAN, Aadhaar).
Submit it at your fund house’s office.
Take this small step today so that your loved ones are protected tomorrow.
Kapil Jain is the Director of Enrichwise Financial Services Pvt. Ltd and Enrichwise Insurance Broking Services Pvt. Ltd., an IIM Indore Gold Medalist in Finance and an investor for 25+ years.
Enrichwise is an AMFI registered Mutual Fund Distributor and ISO 9001:2015 Certified.
For Investments, Insurance and Tax Advisory – Contact +919821860804 or email planner@enrichwise.com