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SEBI has overhauled the nomination guidelines in which it has allowed security market investors including mutual fund investors to appoint up to 10 nominees.
The market regulator made this decision during the board meeting held today in Mumbai.
Here are the key changes to the regulations:
- In the case of an incapacitated investor, nominees can act on their behalf, with checks in place for risk mitigation and balances
- Existing norms will be simplified to reduce paperwork and delays for nominees and joint holders
- AMCs/RTAs will have to obtain a unique identifier like- copy of PAN, Passport number or Aadhaar
The regulations aim to establish consistent norms across demat accounts and mutual fund investments: Here are the main changes:
- Nominees acting as trustees for legal heirs
- No limit on the number of times a nominee can be changed
- Option to specify guardians for minor nominees
- Clarification on asset apportionment to surviving nominees
- Survivorship rules for joint holdings, which means in the case of death of one of the joint owners, the asset is passed to the surviving owner or owners
- No rights will be granted to the legal heirs of a deceased nominee
- Creditors' claims taking precedence over nominee transmission if assets were pledged
- Optional nomination for joint accounts, with opt-out requirements for single accounts.
