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Transmission of MF units on death of MF investors will get smoother.
SEBI has introduced a centralized system through which a nominee can reach a mutual fund company or a registrar to report the demise of an investor and subsequently, it will get updated across all fund houses. There will be no need to reach out to another RTA or AMCs to update the demise of an investor.
While the nominee will continue to reach different fund houses to make request for the transfer of MF units, the documentation process will get simpler and proceeds will reach the nominee’s account faster, believe MF experts.
In a circular issued today, SEBI has asked market intermediaries including mutual fund companies, RTAs and KRAs to facilitate online and offline process to verify the death certificate. The market regulator said that the death certificate should be verified by the next working day. Also, such a request has to accompany PAN of the deceased investor.
Also, intermediary has to keep the record of relationship of an applicant with the deceased along with his contact details.
Once the verification is done, the intermediary will have to block all debit transaction like SIP in the account or folio of the deceased investors. In case of joint accounts, there will be no change, clarified SEBI.
If death certificate is not received or cannot be verified, the intermediary will have to submit a KYC modification request in the KRA system that ‘information on death of investor received, confirmation awaited’.
SEBI has also asked AMFI to issue standard operating procedure (SOP) on its website for uniform implementation across fund houses.
The circular will come into effect from Jan 01, 2024.
