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Sebi Simplifies Demat Nomination Rules
18 Mar
Summary
- Nomination will be the default for new demat accounts.
- Only nominee's name and relationship are mandatory.
- Maximum nominees reduced from 10 to four.
The Securities and Exchange Board of India (Sebi) has proposed significant changes to simplify nomination rules for demat accounts and mutual fund folios, aiming to address operational challenges reported by industry participants.
The proposed framework makes nomination the default setting for investors opening new accounts. Individuals will need to actively choose to opt out of nominating someone and provide a declaration. This change replaces previous, more complex verification methods.
Sebi also plans to streamline the information required for nominees. Henceforth, only the nominee's name and their relationship to the investor will be mandatory fields. Optional details like address and percentage share will no longer be required.
Furthermore, the regulator has suggested revising the maximum number of nominees allowed. While a previous update increased this limit to 10, the current proposal aims to restrict it to four, citing operational complexities and data indicating low usage of more than two nominees.
