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Mutual funds will soon have to compulsorily take a declaration from investors who do not want to register a nominee. SEBI has asked mutual funds to provide investors with the option to skip registering nominees from August.
"Investors subscribing to mutual fund units on or after August 1, 2022, shall have the choice of opting out of nomination through a signed Declaration form," the regulator said. The regulator has issued a common form for the declaration.
The form requires investors to sign below the following declaration: “I hereby confirm that I do not wish to appoint any nominee(s) for my mutual fund units held in my mutual fund folio and understand the issues involved in non-appointment of nominee(s) and further are aware that in case of death of all the account holder(s), my legal heirs would need to submit all the requisite documents issued by Court or other such competent authority, based on the value of assets held in the mutual fund folio”.
Mutual funds can also take the declaration online by using e-Sign facility.
The regulator has allowed mutual funds time till March 31, 2023 to either get the nomination details or 'no nominee' declaration from investors who are yet to register a nominee.
"All the AMCs are advised to set deadline as March 31, 2023 for nomination / opting out of nomination for all the existing individual unit holder(s) holding mutual fund units either solely or jointly, failing which the folios shall be frozen for debits," the circular stated.
