As the last date for mutual fund and stock market investors to finalise their nominations neared, SEBI has extended the deadline yet again. Investors now have more time to complete the nomination process for their investments.
In a circular issued on December 27, the Securities and Exchange Board of India (SEBI) has extended the deadline for investor nominations to June 30, 2024. Investors have been advised to either select nominee(s) or opt out of the nomination process before the updated deadline.
“As a response to requests from market participants and to simplify compliance for investors, the deadline for submitting the ‘choice of nomination’ for Demat accounts and mutual fund folios has been extended to June 30, 2024,” the SEBI circular reads.
It marks the second extension of the deadline, following a previous extension from September 30 to December 31. The latest extension to June 30 comes as a relief for numerous investors who struggled to complete their nominations on time. The extended deadline prevents potential issues such as freezing MF folios or demat accounts for debits, ensuring investors can still make redemptions or withdrawals even if they haven’t completed the nomination process on time.
Around 25 lakh PAN holders had not updated their nominations in their MF folios as of September 2023, according to data from the registrar and transfer agent CAMS. Despite reaching out via email for the latest data, no response has been received from CAMS.
If an investor dies, the nominee plays a vital role in facilitating the transmission of assets to the next of kin. The absence of a nominee has a great impact on the smooth transmission process of the assets.
Importance of Nomination
Nomination is a crucial process for securities holders as it lets them choose who will receive their securities if they pass away. It ensures a smooth transfer of investments to the selected beneficiaries.
The Nomination Process
To add a nominee to a demat account, log in, go to Profile, and select My Nominees. Select add nominee or opt-out, then provide nominee details, upload an ID proof, allocate the percentage share, and e-sign with Aadhaar OTP.
Only individuals holding demat accounts can nominate; entities like trusts and corporations cannot. Joint holders can nominate, but if one passes away, the securities go to existing holders unless there’s a nominee. NRIs can nominate directly, but the power of attorney holders and minors cannot nominate.
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