In a major development, the deadline for nominations in demat and trading accounts has been extended to September 30, 2023. Similar decision is expected for mutual funds too, industry sources informed CNBC-TV18. Currently, the last date for nominations in mutual funds is March 31, 2023.
"Based on the assessment of the trading as well as demat accounts in which
choice of nomination details (i.e. furnishing of nomination or declaration for opting out of nomination) has not been updated and on the basis of representations received from the stakeholders, it has been decided that freezing of accounts shall come into force with effect from September 30, 2023 instead of March 31, 2023," the Securities and Exchange Board of India (SEBI) said in a circular.
The Sebi has made it mandatory for all demat and trading account holders to have a nominee. As a result, demat accounts can be frozen if investors fail to add nominations by September 30, 2023.
Existing investors who have already provided nomination details are not required to resubmit the nomination details. Those who have not submitted nomination details to date and intend to submit their nomination or opt out of nomination may also be allowed to do so.
Sebi has advised stock exchanges and depositories to bring the provisions of this circular to the notice of their constituents and also disseminate the same on the website. It has further asked them to monitor the efforts made by trading members and depository participants for updation of ‘choice of nomination’ by their clients and submit a report to this effect on monthly basis within next seven days from the end of the month.
"The first such report shall be submitted by May 07, 2023 for the month of April 2023," it said.
How can nomination be done?
Investors can submit or withdraw their nominations via two-factor authentication login on trading platforms for stock brokers or depository participants that offer such a service
The details previously required, like mobile number, e-mail ID and identification details of the nominee/guardian of the minor nominee, have been made optional.
There is a declaration form which should be signed by the account holder. Nomination or declaration forms can also be filled online using the e-sign facility which does not require a witness signature until the account holder uses a thumb impression instead of a signature.
