SEBI Eases Nomination Rules For Demat, Mutual Fund Investors

The new nomination framework from SEBI makes demat and mutual fund account operations easier, making it simpler for families to claim investments, according to the reports.

Investors who establish mutual fund folios or single holder demat accounts after September 1, 2026, will be required to either choose a beneficiary or expressly opt out under the revised framework. According to SEBI, the action is meant to guarantee that, in the event of an investor’s passing, investments may be smoothly transferred to family members.

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Furthermore, the regulator has greatly streamlined the procedure. Through Aadhaar e-sign, OTP authentication or digital signatures, investors can now designate up to three nominees and finish the entire process online. Unless the investor uses a thumb impression, witness signatures will no longer be necessary for paper forms, as per the reports.

Crucially, SEBI has lessened the information load placed on investors. Other data such as PAN, Aadhaar, phone number, and email address are optional, while the nominee’s name and relationship with the investor are necessary.

Following operational issues raised by market investors and intermediaries regarding the initial nomination rules enacted last year, these amendments have been made. The regulator has tried to find a compromise between making things easier for investors and lowering the likelihood of financial assets going unclaimed.