SEBI has done away with the requirement of making nomination compulsory in joint MF folios.
In a circular, SEBI said, “In order to simplify, ease and reduce cost of compliance, a working group was constituted to review the present regulatory framework of mutual funds and recommend measures to promote the ease of doing business. Based on the recommendations of the working group, a public consultation was carried out. Accordingly, it has been decided that the requirement of nomination specified under the master circular for mutual funds shall be optional for jointly held mutual fund folios.”
So far, all joint holders are required to appoint nominees in their folios.
Earlier, SEBI had said that since the surviving holder in a joint MF folios takes precedence over nominee during the transmission of units, the risk of unclaimed units is low.
However, there is no change with respect to single MF folios. This means, nomination remains mandatory for all MF folios with single holding.
SEBI clarified that all existing folios without nomination will have to opt for nomination or opt out of nomination by June 30, 2024
