On December 27, 2023, SEBI extended the deadline for investors to choose nominations for their demat accounts and mutual fund folios to June 30, 2024. Failing to do so would have resulted in freezing these accounts. However, in a circular dated June 10, 2024, SEBI simplified nomination process for investors. Based on the representations received from market participants, SEBI has made the following key decisions to enhance ease of compliance and investor convenience.

• Demat and Mutual Fund accounts will not be frozen due to non-submission of nomination choices. However, all new investors or unit holders will still be required to provide the 'Choice of Nomination' for demat accounts or mutual fund folios, except for jointly held demat accounts and mutual fund folios.
• Listed Companies/RTA can’t withhold pending payments for lack of nomination. Any payments, such as dividends, interest, or redemption payments that are currently withheld by listed companies or RTAs due to the lack of a 'choice of nomination,' will now be processed.
• Security Holders can lodge grievances and receive payments without submitting nomination choices.
• Communications via emails and SMS should be sent by the fund houses and RTAs to encourage account holders to update their 'choice of nomination'
• A pop-up should be added to web or mobile applications and platforms used by depositories, depository participants, and AMCs. This pop-up will be displayed when investors log into their accounts and will prompt only those whose MF folios or demat accounts lack a 'choice of nomination.'
• Investors will need to fill in three mandatory fields when updating nomination details. These include the name of the nominee, the share of each nominee, and the relationship with the applicant.

Any comments / feedback / corrections, most welcome. Please contact:

Team Complinova

https://www.complinova.com/

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