SEBI changed the rule for making ‘nominee’ for Mutual Funds investors, the new rule will be applicable from August 1
Mutual funds
SEBI NEW DELHI: With effect from August 1, investors investing in mutual funds will get the option to name or opt out as ‘nominee’, the BSE said on Wednesday. As per the Securities and Exchange Board of India (SEBI) circular, the regulator also issued a draft for nominating or removing the person. It also gave time till March 31, 2023 to asset management companies (AMCs) to give an option to all individual unit holders investing in mutual funds to nominate individuals or opt out of this facility.
You will be able to submit the form online or by going to the office
Under the new arrangement, AMCs will have to provide unitholders with the option to submit either the ‘nominee form’ or the option of online or in-office submission to opt out of the ‘nominee’ regime as per the choice of the investors. The objective of this initiative is to bring uniformity in the activities of all parties in the securities market. Last year, SEBI had given a similar option for new traders and investors opening demat accounts.
Benefits of appointing a nominee
Appointment of a nominee means that in the event of the death of the investor, the entire fund will be transferred to the nominee. If the nominee is not appointed, the heir of the investor has to complete various formalities to get the money. Various documents have to be presented. After a long process, the relative of the investor gets the money. That’s why it is very important to make a nominee.
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