Listen to this article
SEBI has extended the timeline to comply with the nomination guidelines by 3 more months i.e. from October 1 2023 to January 01, 2024.
With this, mutual funds will have to compulsorily take a declaration from investors if they opt for nomination by filing it with the MF application form or skip it. Mutual funds can also take the declaration online by using e-Sign or OTP facility.
SEBI clarified that all existing folios without nomination will have to opt for nomination or opt out of nomination by December 31, 2023.
The market regulator has directed fund houses and RTAs to encourage investors to complete their nomination at the earliest. It said, “AMCs and RTAs shall encourage the unit holder(s)to fulfil the requirement for nomination/opting out of nomination by sending a communication on fortnightly basis by way of emails and SMS to all such unit holder(s) who are not in compliance with the requirement of nomination. The communication shall provide guidance by which the unit holder(s)can provide nomination or opt out of nomination.”
Non-compliant folios will be frozen for investment and redemption, clarified SEBI.
