 "Nominee")
The Securities and Exchange Board of India (Sebi) has proposed to bring in additional flexibility in the nomination process for mutual fund and direct equity investors.
According to a consultation paper issued on Friday, the regulator plans to give investors the option to add several nominees (a maximum of 999) and provide unrestricted access to the nomination facility for nominee additions, changes and even cancellations.
Additionally, Sebi has proposed to make it mandatory to provide nominees' contact details and personal identifiers like name of either parent and government issued IDs to make it easier for institutions to contact and identify the nominees post the death of the investor.
"Nominations should be made, changed or cancelled in a safe, secure, verifiable manner. By the use of digital signature certificate or Aadhaar based eSign or physical signatures of the investors or through dual authentication," it said in the consultation paper.
Other measures that have been planned include maintenance of a record of all the changes with respect to nominations and access to nominee details through account aggregator service and other routes.
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Sebi also plans to make it mandatory for mutual funds and brokers to provide options to specify guardians
Investors may also get options to provide additional details like specifying a guardian for minor nominees, if the nominee (s) can conduct transactions in case the investor gets permanently or temporarily incapacitated.
The transfer of assets to the nominee will be subject to completion of KYC alone and clearance from creditors if the investor had pledged shares or MF units, the document states.
In case of disputes, the nominees and claimants will have to contest among themselves without reference to the depositories, mutual funds and their registrars, the document states.
Investors will continue to have the option to 'opt out' from declaring a nominee.
In July 2021, Sebi came out with a circular making it mandatory for demat account holders to declare a nominee or choose to 'opt out' of the nomination process.
The deadline, which was set at March 31, 2022, has been extended to June 31, 2024. For MFs, a similar circular was released in June 2022. After several extensions, the deadline was shifted to June 30, 2024.
