Get this done by March 31 or you might lose all mutual fund investments

The deadline for all current mutual fund folios, including those held jointly, has been set for March 31, 2023, after which the folios would be blocked for debits.

“From August onwards, SEBI has come up with a circular to bring uniformity of practice in case of nomination in mutual funds. So, from August 1, new investors will have a choice to either provide a nomination or opt out of domination through a declaration thing. For the existing investors, subject to March 31 2023, they need to either add a nominee or they need to opt-out of the nomination. So, this is something they want to bring in a process wherein the nomination process is done by all the investors.” Tarun Birani, Founder & Chief Executive Officer at TBNG Capital Advisors had earlier told CNBC-TV18.

Under the new structure, asset management firms (AMCs) will have to give unit holders the option of submitting either the nomination form or the declaration form to opt out of the nomination in the either physical or online form, depending on their preference.

In the case of a physical option, the forms will carry the wet signature of all the unit holders and in the case of the online option, the forms will be using an e-sign facility instead of the wet signature of all the unit holders.

AMCs must guarantee that suitable mechanisms for offering the e-sign facility are in place, and they must take all necessary actions to ensure the confidentiality and safety of client records.

The action is intended to create uniformity in practices across all securities market participants.

SEBI provided a similar option to investors creating new trading and demat accounts in 2021.

There are currently 42 mutual fund houses that manage assets of approximately Rs 40 lakh crore.