New Rules issued by SEBI for Demat and Mutual Fund Accounts
The Securities and Exchange Board of India (SEBI) has introduced new regulations related to nominations for securities, including Demat and Mutual Fund Accounts.
In new regulations, if an investor is unable to manage their affairs, then in that case the nominee will be allowed to make financial decisions and will be granted full authority to operate a demat and mutual fund account and take the financial decisions on behalf of the investor. The new guidelines came into effect on 28 November 2024.
Vital Points to Remember
- The investor must appoint a nominee as the beneficiary, with some risk mitigation checks and balances.
- According to the new rules, the unique identifiers for nominees must obtained from either their PAN, Passport Number, or Aadhar. Previously, KYC documents were required.
- As per the new rules, the number of nominees has increased from 3 to 10 now.
- The investor has the choice to nominate a person who will be officially approved to perform transactions on behalf of the former in case he or she becomes incapacitated.
SEBI has made the asset transfer process to the nominee as simple as possible, aiming at reducing paperwork and speeding up the procedure.
