SEBI’s New Nomination Rules for Demat Accounts & Mutual Funds
SEBI has introduced new nomination rules for demat accounts and mutual fund (MF). The new rules became effective from March 1, 2025 while additional guidelines will be introduced in June 2025 and September 2025.
Key Changes in Nomination Rules
Here are the key changes in the nomination rules for demat accounts and mutual funds.
Nomination and Number of Nominees
- Investors can now nominate up to 10 persons and can also specify the percentage of assets to each nominee.
- Single account holders can choose to opt-out of nomination, either online or offline.
Simplified Transmission Process
- In joint accounts, if one holder passes away, the surviving holder(s) can take control of the assets without needing additional KYC, unless it was requested earlier.
- Nominees inheriting assets can either continue jointly with other nominees or open separate individual accounts for their share.
Power of Attorney (POA) & Role of Nominees
- The POA holder cannot be assigned as a nominee.
- If an investor becomes physically incapacitated but remains legally competent, they can authorise a nominee to manage their account.
Reduced Paperwork & Legal Protection
- Nominees do not need to submit affidavits, indemnities or notarised documents to claim assets.
- Financial institutions cannot be held responsible for any disputes among nominees or legal heirs.
- In case of an odd lot division, the extra asset will go to the first nominee by default.
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Investments in the securities market are subject to market risks, read all the related documents carefully before investing.