New Delhi: SEBI has come up with new operational guidelines in order to streamline and simplify the nomination process in mutual funds. The move is expected to bring about certain changes for the nomination process. SIP investors and mutual fund aficionados should and must understand the changes that SEBI aims to bring to the process. Let us deep dive.
From 1st June, 2025, a new format will be used for filing the nomination process. The details regarding the new process are available on the websites of all mutual fund companies, their registrars, and on the website of the Association of Mutual Funds of India (AMFI).
Mutual Fund Nomination
In the new form, investors have to provide the complete details of the nominee. The details include the nominee’s full name, relation, share (in percentage), address, email ID, and mobile number. In the new guidelines, a further layer of nominee identification has been added. Now, it is necessary to provide any one of these details to identify the nominee: PAN, driving license, last four digits of Aadhar, or passport number.
In the event of incomplete information, the form may be rejected as “Not In Good Order” (NIGO). Additionally, if the investors wish, they can delegate their authority to the nominee to operate the mutual fund on their behalf, simultaneously making the nominee eligible for the redemption of investment up to a certain limit. This can happen only when an investor becomes incapable of doing the investment work on their own.
If investors do not want to make a nomination, they can choose the “opt out” option while filing the nomination. There has been no change in the process. If the nomination is already registered in the mutual fund folio, then there is no need to change anything.
Currently, the maximum limit for nominees while filing the nomination is three. The current limit will be around 31st August. Thereafter, from 1st September onwards, the limit will be extended to 10 nominations.
In the event of failure of the upgradation of the mobile number or email ID of the nominee, the online process would not work. In such cases, the method of offline will have to be adopted.
Why Nomination is important in Mutual Fund?
If one nominates someone, then the nominee would be the rightful heir to the investment after the death of an investor. In the case of the death of the investor, nomination makes the transfer process of units quite easy. Without the nomination, the legal heirs have to furnish many documents like a will, a legal certificate, and a no-objection certificate to claim the investment.
The process for filing the nomination is quite simple. One can fill the form by visiting the website of the registrar and transfer agent (RTA) or through the websites of the fund house.
SEBI has introduced streamlined mutual fund nomination guidelines effective June 1st, 2025. The new process simplifies nomination registration, requiring complete nominee details, including PAN/Aadhaar/driving license. The nominee limit increases to 10 from 1st September. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
