The regulator said payments currently withheld by listed companies or RTAs that have not submitted a ‘nomination election’ will be processed accordingly.
The regulator had earlier set a deadline of June 30, 2024, for all existing individual mutual fund holders to nominate or reject nominations.
Capital markets regulator Sebi on Monday eased rules for existing investors by scrapping norms freezing Demat accounts and mutual fund folios for failure to provide 'nominated election'.
Additionally, investors holding securities in physical form will be entitled to receive all payments, including dividends, interest or redemption proceeds, as well as file a complaint or avail the services of the Registrar of Issues and Stock Transfer Agent (RTA). . If you do not submit ‘candidate selection’.
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The regulator had earlier set a deadline of June 30, 2024, for all existing individual mutual fund holders to nominate or reject nominations.
Failure to follow the rules may result in your account being frozen for withdrawals.
Based on representations received from market participants, Sebi has decided that for compliance and investor convenience, regular accounts and mutual funds will not be frozen in case of existing investors or unit holders without filing ‘nomination election’. According to Monday's circular, this is a double edition.
The regulator said payments currently withheld by listed companies or RTAs that have not submitted a ‘nomination election’ will be processed accordingly.
Sebi also said that all new investors/unit holders will continue to have to mandatorily provide ‘nomination election’ for demat accounts/mutual fund folios (excluding jointly held demat accounts and mutual fund folios).
The regulator has asked depository participants, AMCs or RTAs, respectively, to encourage Demat account holders or mutual fund unit holders to update their ‘nomination selection’ by sending bi-weekly communications via email and SMS to all investors. No 'nomination selection' provided.
The communication should instruct Demat account holders/mutual fund holders to provide ‘nomination selection’.
To encourage existing investors to provide 'nomination selection', a pop-up will be provided through web or mobile platforms for depository institutions and depository participants when logging into their Demat accounts and for AMCs when logging into their MF accounts. From October 1st.
The regulator has also provided nomination and rejection forms for both demat accounts and MF folios. It said that to update candidate details, only three fields are required to be provided – candidate name, candidate stake and relationship with applicant.
Why are place names important?
Nominating a mutual fund is important to ensure smooth and hassle-free transfer of your invested funds to your loved ones in case of unfortunate death.
Having a nominee allows the person you nominate to claim your mutual fund units with minimal paperwork compared to the lengthy legal process involved in a will or inheritance.
Nominations help prevent family conflicts regarding inheritance, especially if there is no will.
(including PTI input)