How to Update Nominee in Mutual Funds Online: Mutual fund investors and demat account holders need to nominate someone in their demat account before the deadline on September 30, 2023. Markets regulator Sebi has made it mandatory for all demat account holders to either furnish nomination declarations or opt out of nominations by September 30. Here’s a step-by-step guide to nominate or opt out of nomination.
In a circular on March 28 this year, the Securities and Exchange Board of India (Sebi) said, “Based on representations received from the market participants, it has been decided that the provision mentioned at para 4 of SEBI circular dated June 15, 2022 with regard to freezing of folios, shall come into force with effect from September 30, 2023, instead of March 31, 2023.”
According to this, failing to nominate may result in the freezing of your mutual fund folio.
About 25 lakh PAN holders that are yet to update their nomination details, according to the records of the registrar and transfer agent (RTA) CAMS.
What Is Nomination?
You can appoint any of your loved ones (only individuals) to receive securities held in your demat account after death.
Who Can Nominate, and Who Can Be A Nominee?
Any individual demat account holder can nominate. A non-resident Indian can also nominate. An NRI can also be a nominee.
Non-individuals like Trust, body corporate and partnership firms cannot nominate. Non-individuals cannot be nominees as well.
Power of attorney holders can also not nominate.
A minor is also not allowed to nominate. However, a minor can be a nominee.
Can You Change Nominees?
Yes, a nominee can be changed at any time by the account holder.
How Many Nominees Can You Appoint?
You can appoint up to 3 nominees.
What Are Opt-In Nomination and Opt-Out Nomination?
Opt-in means you wish to nominate nominees in your demat account. Opt-out nomination means you do not wish to nominate. Though the option is available, it is recommended to nominate in your demat account.
How To Nominate: A Step-By-Step Guide
You can nominate through both online and offline. In the offline method, you can also nominate offline by submitting the nomination form at the DP branch.
In the online method, you need to visit your intermediary’s web portal or NSDL web portal.
Step 1: Visit NSDL’s portal — https://nsdl.co.in/
Step 2: Click on the ‘Nominate Online’ option given on the homepage
Step 3: Enter your DP ID, client ID, PAN, submit OTP
Step 4: Select the option ‘I wish to Nominate’ or ‘I do not wish to nominate’
Step 5: If you choose ‘I wish to Nominate’, a new page will open. Enter the Nominees Details
Step 6: On eSign Service Provider’s page, enable the checkbox and click on ‘Proceed’
Step 7: Verify OTP
On successful submission of OTP, you will receive a confirmation. On DP’s confirmation, the nomination will be updated in your demat account.