Mutual funds have to ensure all investors register their nominations with them. The requirement is part of the best practices guidelines AMFI sent recently to mutual funds and RTAs on issues related to nominations and minors
Mumbai: AMFI has asked mutual funds to make sure all investors register their nominees with them. The new instructions will have to be implemented by mutual funds and RTAs from April 1, 2011.
Mutual funds are required to change their SID, SAI, KIM, application form, transaction form, and website by April 1, 2011 to reflect the new requirements.
The requirements as per the AMFI guidelines are as follows:
Nomination
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An investor who wishes to open a new account will be required to appoint a nominee if the investments are solely held. However, if the investor does not wish to do so, there must be a separate confirmation of it in writing.
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In case of joint holders, all should sign the request for nomination/cancellation of nomination.
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Holders of power of attorney cannot sign the nomination form.
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Nomination will not be allowed for investments held on behalf of a minor.
The committee has asked fund houses to create awareness about the benefits of nomination through information in application forms, letters, emails and SMSes to investors. The guidelines require the account statement to prominently state whether a nominee has been appointed or not.
Minor Attaining Majority - Status Change:
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AMCs will have to remind investors (guardians and the minor) in advance before attaining majority to update their status along with documentation. On failing to do it, all instructions concerning SIPs, SWPs, STPs, etc will be suspended by fund houses.
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AMCs will have to update their records for existing folios wherein birth date of minors is not available.
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For instructions registered beyond a minor’s date of majority, mutual funds will have to intimate investors that the standing instructions will be executed only till the date of the minor attaining majority.
List of documents to change account status from minor to major:
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Services request form, duly filled and containing details like name of the major, folio numbers, etc.
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New bank mandate where account changed from minor to major.
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Signature attestation of the major by a manager of a scheduled bank / bank Certificate / letter.
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KYC acknowledgement of the investor who turns major.
Besides, for ‘on behalf of minors’ accounts certain document requirements have been made compulsory.
Change in Guardian:
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Request letter from the new guardian
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No objection certificate (NoC) or Consent Letter from existing guardian or Court Order for appointing a new guardian, in case the existing guardian is alive.
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Notarised copy or attested copy of the death certificate of the deceased guardian, where applicable. The attestation may also be dome by a special executive magistrate, AMC authorised official or manager of a scheduled bank.
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The new guardian must be a natural guardian (i.e. father or mother) or a court appointed legal guardian.
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Bank attestation attesting the signature of the new guardian in a bank account of the minor where the new guardian is registered as the guardian.
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KYC of the new guardian.
