Last day for adding nominees to mutual funds, demat accounts is Dec 31: Check process and more

Mutual fund investors and demat account holders trading in an individual capacity should mark December 31, 2023, on their calendars as a crucial deadline. The Securities and Exchange Board of India (SEBI) has made it mandatory for all such account holders to either furnish nomination declarations or opt out of nominations by this date.

Existing investors who have already provided nomination details are not required to resubmit details.

Those who have not submitted nomination details till date and intend to submit their nomination or opt out of nomination should do so.

Nomination is a process through which a securities holder designates who should receive their securities in the event of their death. It's a step to ensure that the investments are transferred smoothly to the chosen beneficiaries.

Without nomination, the investments may be subject to lengthy and potentially costly legal procedures.

Adding a nominee to a demat account involves a few steps, primarily carried out online for ease and efficiency. Investors can log in to their demat accounts, proceed to the 'Profile Segment,' and navigate to the 'My Nominees' section.

From there, the option to 'add nominee' or 'opt-out' is available.

Details of the nominee, including an uploaded ID proof, percentage share allocation, and an e-signature via Aadhaar OTP, complete the process.

The scope for nominees is broad, encompassing family members such as parents, spouse, siblings, and children.

Moreover, even minors can be nominated, albeit with the provision of their guardian's details.

Only individuals holding demat accounts singly or jointly can nominate. Non-individual entities like societies, trusts, corporations, partnership firms, Hindu Undivided Families, and holders of Power of Attorney cannot nominate.

Joint holders can nominate, but if one of them passes away, the securities will be transmitted to the surviving holders unless there is a nominee.

NRIs can nominate directly, but power of attorney holders cannot nominate on their behalf. Minors cannot nominate either directly or through a guardian.

Investors can change the nominee(s) at any time by filling out a nomination form and submitting it to the Depository Participant (DP) or via the online process.

If investors miss the December 31 nomination deadline, SEBI may freeze debits from their holdings. This means they won't be able to withdraw from mutual funds or use their demat accounts for trading.