Deadline for adding nominees to mutual funds extended, new date is…


The previous deadline was September 30.

New Delhi:

Markets regulator SEBI on Wednesday extended the deadline for mutual fund account holders to January 1 to appoint a receiver or opt out by submitting a declaration form, failing which their folios will be frozen.

Previously, the deadline for existing mutual fund owners to make a nomination election was on or before September 30.

The move aims to help investors secure their assets and pass them on to their legal heirs.

“Based on representations received from the market participants, it has been decided that the provision… of freezing of folios shall come into force with effect from January 1, 2024 instead of September 30, 2023,” SEBI said in a circular.

SEBI further asked asset management companies (AMCs) and RTAs to encourage the unit holder to comply with the requirement of nomination/opt-out of the nomination by sending a fortnightly communication in the form of emails and SMS to all such unit holders , which does not comply with the nomination requirement.

The Securities and Exchange Board of India (SEBI) in its circular dated June 15, 2022, made it mandatory for mutual fund subscribers to submit the nomination information or opt-out statement on or after August 1, 2022.

The deadline was extended several times.

Market experts are of the view that many mutual fund foils have been opened in the past without designating someone to whom the assets should be transferred in case of account holders.

This means that the rightful heirs found it difficult to get the assets transferred to them due to the difficulty with various forms of documentation requirements.

On Tuesday, the regulator extended the deadline by three months to the end of December for existing demat account holders to give a choice of nomination or formally opt out of nomination through a declaration form.

Additionally, the submission of ‘choice of nomination’ for trading accounts has been made voluntary by SEBI as a step towards ease of doing business.

(With the exception of the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)


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