Demat Accounts Safe Without Nominee, SEBI Confirms


Sheetal Bhalerao

Sheetal Bhalerao

Jun 12, 2024


In a recent update, the Securities and Exchange Board of India(SEBI) relaxed regulations for existing investors.

Demat Accounts Safe Without Nominee, SEBI Confirms

SEBI Not Freezing Demat Accounts, Mutual Fund Portfolios Over Non-Nomination

SEBI has done this by abolishing the rule that mandated freezing demat accounts and mutual fund portfolios if a choice of nomination was not provided. 

Besides this the investors who possess securities in physical form are also entitled to receive any payments, such as dividends, interest, or redemption amounts. 

In addition to this, the investors can also submit grievances or request services from Registrars to Issue and Share Transfer Agents without having submitted a choice of nomination. 

The regulator had established June 30 as the deadline for all current individual mutual fund holders to either nominate a beneficiary, or formally decline to do so earlier. 

In case of non-compliance of this regulation, it could result in the freezing of their accounts, preventing any withdrawal. 

In a circular on Monday, SEBI has decided that for existing investors or unitholders, non-submission of choice of nomination will not result in the freezing of demat accounts as well as mutual fund folios, based on representations received from the market participants, for ease of compliance and investor convenience.

So now, the payments withheld presently by the listed companies or RTAs for not submitting a choice of nomination will be processed accordingly, said the regulator.

Choice Of Nomination Is Mandatory

It is noteworthy here that all new investors/unitholders would continue to be required to mandatorily provide the choice of nomination for demat accounts/mutual fund folios (except for jointly held demat accounts and mutual fund folios), SEBI noted. 

 Besides this the regulator has asked depository participants, AMCs or RTAs, to encourage demat account holders or mutual fund unitholders, respectively, to update choice of nomination by sending a communication on a fortnightly basis.

It could be simply done by way of emails and SMS to all such investors who have not provided the choice of nomination. 

It is expected that this communication should provide guidance for demat account holders/ mutual fund unit holders to provide a choice of nomination.

A pop-up would be provided on the web or mobile platform to the investors by depositories and depository participants while logging into the demat account.

 This would be provided to encourage the existing investors to provide a choice of nomination by AMCs while logging into their MF account from October 1.

 In the case of demat account and MF folios, SEBI has also provided a format for providing nomination and opting out of nomination for both. 

According to this, only three fields need to be provided mandatorily for updating nomination details—name of the nominee, share of the nominee and relationship with the applicant.


Sheetal Bhalerao
Sheetal Bhalerao
  • 796 Posts

Subscribe Now!

Get latest news and views related to startups, tech and business

You Might Also Like

Business
Dec. 8, 2022

Beat The Burden Of Medical Inflation With A Health Insurance

As disease rates rise and medical technology develops, treatment costs climb. It’s essential to understand that medical costs are not exclusively associated with hospitals. The cost of prescription drugs, diagnostic procedures, ambulance and operating room fees, consultations with doctors, and other costs are also constantly increasing. All of them could put a big strain on […]

Business
Dec. 8, 2022

3 Biggest Changes Of iOS 16.2 Update That Every iPhone User Should Know!

In its latest update Apple said that it is preparing for the iOS 16.2 update for iPhones across the world. Notably, like the previous release, there are a couple of changes coming for the iPhones.  iOS 16.2 Update Release Date So far, Apple has not announced a release date for iOS 16.2 update. Reportedly, the […]

Business
Dec. 8, 2022

300 Microsoft Employees Create Employee Union, First Time Ever: This Is How Microsoft Reacted

Around 300 workers at Microsoft Corp.’s ZeniMax Studios have commenced the process of forming a union which is said to be the first at the software giant in the US.  Here, Microsoft Corp.’s ZeniMax Studios known for popular video games including Skyrim and Fallout. Forming Union In Microsoft Corp Moreover, the quality assurance employees at […]

Business
Dec. 7, 2022

India Beats China In Air Travel Safety: Ranking Jumps From 102 To 48 In Global Aviation Safety

India’s air safety protocols and executions have improved drastically over the years, as validated by the findings of a specialized agency of the United Nations, the International Civil Aviation Organization or ICAO. The UN watchdog has upgraded India’s ranking in terms of aviation safety to the 48th position, jumping past the rankings of countries like […]

Recent Posts

Related Videos

   

Subscribe Now!

Get latest news and views related to startups, tech and business

who's online