The Securities and Exchange Board of India (SEBI) has rolled out updated nomination rules for mutual funds and demat accounts, effective from March 1, 2025.

These updates aim to improve the investor experience, streamline the nomination process, and resolve potential legal succession issues. Let’s explore the key highlights of these new rules and how they can benefit you.

Key Changes in SEBI’s New Nomination Rules

Increased Number of Nominees
Under the new rules, investors can now nominate up to 10 people, whereas earlier you could nominate only three individuals. This expanded limit provides greater flexibility, especially for those with larger families or multiple dependents.

Nominees Can Act on Your Behalf During Your Lifetime
In a significant shift, nominees can now act on behalf of investors who are alive but unable to manage their finances due to illness or incapacitation. This provision ensures that your financial matters are handled seamlessly, even in challenging circumstances.

Standardized Nomination Process Across Platforms
SEBI has standardized the nomination process across all investment platforms. This uniformity eliminates confusion and makes it easier for investors to navigate the system, regardless of where they hold their investments.

Allocation of Fixed Shares Among Nominees
Investors now have the option to allocate specific percentages of their assets to each nominee. This structured approach eliminates ambiguity and reduces the likelihood of disputes among beneficiaries. By clearly defining each nominee’s share, the new rules ensure a smoother and more transparent succession process.

Provisions for Predeceased Nominees
In the unfortunate event that a nominee passes away before the investor, the new rules provide a clear mechanism for redistributing the deceased nominee’s share. The assets are automatically reassigned among the surviving nominees, preventing any confusion or legal complications.

No Extra Documentation for Transmission
One of the most welcome changes is the elimination of additional documentation requirements for asset transfers. Previously, nominees had to submit affidavits, indemnities, undertakings, or notarized documents to claim assets. Under the new rules, this bureaucratic red tape has been removed, ensuring faster and more efficient asset transfers to nominees or legal heirs.

The updated nomination rules are a testament to SEBI’s efforts to modernize and streamline the investment landscape. Take advantage of these new provisions to ensure your financial legacy is protected and your loved ones are well taken care of.

For more details, you can refer to the official SEBI circular here.

Stay informed, stay prepared, and make the most of these investor-friendly changes!