On Jan. 10, 2025, IND SEBI issued circular re demat accounts, fund folios nomination.
Nomination mandatory for single holdings, optional for joint accounts; investors can nominate up to 10 persons and must specify percentage share for each nominee.
Nominees must provide personal identifier (PAN/driving license/Aadhaar), contact details, relationship details; KYC completion during investor lifetime made optional.
Power of attorney (POA) holders cannot make the nominations for investors.
Regulated entities must provide both online and physical nomination options; online nominations require digital signature, Aadhaar e-sign, or two-factor authentication.
Physical nominations need signature verification and witness attestation for thumb impressions; entities must acknowledge all nomination submissions, maintain records for 8 years; periodic statements must show nominee name, status per investor choice.
For joint accounts, the assets transfer to surviving holders through name deletion; upon simultaneous death of joint holders, the assets go to nominees or legal heirs.
Nominees receive assets as trustees on behalf of legal heirs; transmission to nominees requires only death certificate and nominee KYC completion; regulated entities must facilitate transfer from nominees to legal heirs when the process is requested.
Circular will be effective from Mar. 1, 2025.
On Feb. 2, IND SEBI proposed to revise/revamp nomination facilities.
IND SEBI issued consultation paper to revise and revamp nomination facilities in the Indian securities market; aims to aid in reduction of unclaimed assets as well as smoothen process for surviving family/beneficiaries/successors of deceased investors.
Proposal
Proposed revisions to nomination facilities for securities (shares, bonds, units of REITs/InvITs/AIFs, other securities) held in dematerialized form in a demat account, and units of mutual fund schemes held in non-materialized form/statement of account.
So as to provide convenience to investors in Indian securities market, uniformity in facilities and procedures, affording certain choices/flexibilities in nomination facilities.
Such revised, revamped nomination facilities will operate without affecting prevalent systems of law governing transmission and succession, re rule of survivorship (joint ownership/holdings); when person died leaving will; and when person died intestate.
Effectiveness
Comments must be submitted via online form by Mar. 8, 2024.
Mar. 2024 Timeline Extended
On Mar. 8, 2024, IND SEBI extended the timeline for submission of comments on the consultation detailed above to Mar. 28, 2024, and provided instructions re submission.
Jan. 2025 Circular Issuance
On Jan. 10, 2025, IND SEBI issued circular re demat accounts, fund folios nomination.
Nomination mandatory for single holdings, optional for joint accounts; investors can nominate up to 10 persons and must specify percentage share for each nominee.
Nominees must provide personal identifier (PAN/driving license/Aadhaar), contact details, relationship details; KYC completion during investor lifetime made optional.
Power of attorney (POA) holders cannot make the nominations for investors.
Regulated entities must provide both online and physical nomination options; online nominations require digital signature, Aadhaar e-sign, or two-factor authentication.
Physical nominations need signature verification and witness attestation for thumb impressions; entities must acknowledge all nomination submissions, maintain records for 8 years; periodic statements must show nominee name, status per investor choice.
For joint accounts, the assets transfer to surviving holders through name deletion; upon simultaneous death of joint holders, the assets go to nominees or legal heirs.
Nominees receive assets as trustees on behalf of legal heirs; transmission to nominees requires only death certificate and nominee KYC completion; regulated entities must facilitate transfer from nominees to legal heirs when the process is requested.
