SEBI relaxed the nomination rules for Demat and Mutual Fund accounts, know what changes were made
Capital markets regulator SEBI on Monday abolished the rule of freezing demat and mutual fund accounts in case of not giving ‘nomination option’, simplifying the rules for existing investors. Additionally, investors holding securities in physical form will now be eligible to receive any payments such as dividends, interest or redemption of securities. Additionally, investors will be entitled to lodge a complaint or request any service from the RTA (Registrar of Issue and Share Transfer Agent) even if they do not choose the ‘Nomination Option’.
June 30th deadline was set
Earlier, the Securities and Exchange Board of India (SEBI) had set June 30 as the deadline for all existing individual mutual fund holders to submit nominee details or opt out of nomination. If the rules were not followed, withdrawals from their accounts could be banned. However, Sebi said in a circular issued on Monday that keeping in mind the ease of compliance and investor convenience, the decision not to ban mutual fund accounts along with demat accounts for not providing ‘nomination option’ to existing investors or unitholders. Has been done
The system of giving ‘nomination option’ will continue
The market regulator said that the payments which are currently withheld due to not giving ‘nomination option’ by the listed companies or RTAs, can also be settled now. Along with this, SEBI made it clear that the system of providing mandatory ‘nomination option’ for demat accounts/mutual fund folios to all new investors and mutual fund unit holders will continue.
Format for giving nomination option released
The regulator has asked depository participants, AMCs or RTAs to encourage demat account holders or mutual fund unitholders to update their ‘option of nomination’ by sending messages on fortnightly basis through email and SMS. The details to be updated must include the name of the nominee, shareholding of the nominee and relationship with the applicant. SEBI has also issued a format for giving the option of nomination and exit from nomination in Demat account and MF folios.
