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Informist, Tuesday, Mar. 17, 2026

 

NEW DELHI – The Securities and Exchange Board of India has proposed easing the processes for on-boarding investors and also the norms for nomination in dematerialisation accounts and mutual fund portfolios. The markets' regulator has proposed lowering the maximum number of nominees for demat accounts and mutual fund folios, and reducing the mandatory details required for nominees. 

 

SEBI Tuesday released a consultation paper to modify the circular on 'Revise and revamp Nomination Facilities in the Indian Securities Market'. The regulator has sought comments from the public on the proposed changes to the circular by Apr. 7.

 

The regulator has proposed capping the maximum number of nominees at four for demat account and mutual fund folios, down from the current norm of 10. "Increasing the nominees to 10 may create a strain on the system leading to operational issues. As regards, banking, depositors can now provide up to 4 nominees," SEBI said. "To align with above, it is proposed that the maximum number of nominees may be increased to 4 for demat account and mutual fund folios."

 

However, the maximum number of joint holders in the demat account and mutual fund folios shall continue to remain at three, SEBI said in the consultation paper.

 

In case of multiple nominees, upon the demise of the investor, the nominees may either continue in the same account or separate account, SEBI has proposed. This would be subject to a condition that the maximum number of joint holders in such accounts shall not be more than three.

 

To simplify the nomination process, SEBI has proposed that only details on the nominee's name and nature of their relationship with the investor would be mandatory. All remaining details such as address, mobile number, e-mail address shall be optional for the investor to provide, the consultation paper said. 

 

"Unlike in banking, the percentage share of each nominee is proposed to be kept optional for the investor to fill up. Where percentage shares are not specified the assets in the account/ folio shall be apportioned among the nominees equally," SEBI said.

 

SEBI has also proposed to simplify the process of onboarding, making the default choice for the investor to opt-in for nomination at the time of opening of a new account. "Any investor not wanting to nominate shall be specifically required to choose 'optout' of nomination," SEBI said. "Upon choosing opt-out, a pop-up message on benefits of nomination and declaration for opt-out out shall be displayed. The investor shall be required to provide consent in this pop-up message to opt-out from nomination."  End

 

Reported by Shubham Rana

Edited by Deepshikha Bhardwaj

 

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