Sebi has set a deadline of June 30, 2024, for all existing individual mutual fund holders to nominate or reject nominations. (Representative image)
Sebi has made important announcements on jointly held mutual fund accounts to promote ease of doing business.
Capital markets regulator Sebi on Wednesday made nomination optional for jointly held mutual fund accounts to promote ease of doing business.
This comes after a working group constituted by the Securities and Exchange Board of India (Sebi) reviewed mutual fund regulations and recommended measures to promote ease of doing business.
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Following the working group's recommendations, a public consultation was conducted proposing options to make joint mutual fund account nomination optional and allow fund houses to have a single fund manager to oversee products and overseas investments.
“It has therefore been decided that the nomination requirement for mutual funds should be optional for jointly held mutual fund folios,” Sebi said in a circular.
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Experts believe that easing the requirements for joint holder recommendation is advantageous in that it simplifies the recommendation process by allowing surviving members to become recommended persons. This simplifies the transfer process and reduces hassle in such situations. Later, the last surviving member can nominate a nominee.
Mutual Fund Recommendation Last Date
Sebi has set a deadline of June 30, 2024, for all existing individual mutual fund holders to nominate or reject nominations. Failure to comply will result in your account being frozen for withdrawals.
Why are nominations important?
Nominations play an important role in ensuring a smooth and seamless transition of mutual fund investments to your loved ones in case of unfortunate death.
Once a nominee is appointed, your nominated beneficiaries can claim the mutual fund units much faster compared to the process without a nominee. This can provide your family with much-needed financial security during difficult times.
Clear designation minimizes the likelihood of disagreements among family members regarding the rightful ownership of your mutual fund investments.
Your nominee submits the claim form along with basic documents such as death certificate and nominee KYC proof. The process is relatively fast.
If there is no nominee, the legal heirs must go through the probate process, which can be time-consuming and complicated.