SEBI Notifies Rules on Uniform Nomination Standards
Moneylife Digital Team 04 December 2024
In a massive relief for incapacitated investors, the market regulator, the Securities and Exchange Board of India (SEBI), has notified rules on uniform standards for nomination facilities. Additionally, the market regulator notified the rule mandating every participant to provide beneficial owners with the option to nominate a person to whom their securities will be transferred upon death. The new norms, announced during SEBI's board meeting on 30 September 2024, will apply across mutual fund investments and demat accounts, ensuring a uniform approach to handling nominations.
 
In a gazette notification, SEBI says, "Every participant shall provide an option to the beneficial owner to nominate, in the manner as may be specified, a person who shall be authorised to conduct transactions on behalf of the beneficial owner in the event of the incapacitation of the beneficial owner."
 
It says, "Where the account is held in the name of more than one person jointly, the joint beneficial owners may together nominate, in the manner specified, a person upon whom the securities held by them shall vest, in the event of the death of all the joint beneficial owners."
 
The depository and participant shall not be liable for any action taken based on a nomination made by the beneficial owner, SEBI clarified.  
 
In October this year, in a significant move aimed at simplifying asset transmission and boosting investor convenience, SEBI approved several amendments to its regulations governing nomination facilities in the Indian securities market. 
 
One of the key amendments is the increase in the maximum number of nominees which rises from three to 10. This change offers investors greater flexibility in selecting multiple beneficiaries. SEBI also introduced provisions allowing nominees to act on behalf of incapacitated investors, with appropriate risk mitigation measures in place to safeguard the interests of all parties involved.
 
Another critical development is the simplification of the transmission process. SEBI aims to reduce the documentation burden for nominees, making it easier and faster for them to claim the assets of deceased investors. Unique identifiers, such as PAN, passport numbers or Aadhaar, will be mandatory for nominees, ensuring enhanced accuracy and transparency in the nomination process. (Read: Nomination: SEBI Approves Investor-Friendly and Uniform Norms)
Comments
Pradeep Kumar MS
2 months ago
I hope it's fully synchronized & aligned with new banking rules.
Multiple standards / frames drive people crazy. Bureaus love it.
parimalshah1
2 months ago
Better late than never.
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