3 weeks ago
Nomination Now Mandatory for Demat Accounts and MF Folios
The securities regulator in India, called SEBI, is changing a rule about who gets your investments when you die.
Starting September 1, 2026, people who own shares or mutual funds in their own name must choose a nominee, which is a person who would get their investments later.
They can pick up to three nominees and decide how much each one gets.
If they do not want a nominee, they can sign a form to say no, or choose "opt out" on their broker's app or website.
If nobody is chosen, the investments go to the legal heirs, usually close family members.
Investments owned together with another person do not need a nominee.
SEBI also made it faster and easier to transfer smaller investments to family members with less paperwork.
The rule exists so that families do not face big problems getting the money after someone passes away.
SEBI's revised nomination rules for single-holder demat accounts and mutual fund folios take effect from September 1, 2026.
Investors can no longer leave the nomination field blank; they must either provide nominee details or submit a signed declaration to opt out.
Investors may appoint up to three nominees and specify percentage shares, with assets divided equally if no allocation is given.
If no nominee is registered, holdings are transferred to legal heirs through the securities transmission facility, which SEBI simplified via a new quick transmission processing (QTP) category and doubled thresholds.
Nomination remains optional for jointly held accounts, where the consent of all joint-holders is required to mention or change a nominee.
- Who
- The Securities and Exchange Board of India (SEBI) and investors holding single-holder demat accounts and mutual fund folios.
- What
- SEBI is making nomination mandatory for single-holder demat accounts and mutual fund folios, with an opt-out declaration option, and is simplifying the transmission of securities to legal heirs.
- Where
- India, covering demat accounts and mutual fund folios, including processes involving depository participants linked to NSDL or CDSL.
- When
- Effective from September 1, 2026; the circular was dated May 29, 2026, and transmission changes were unveiled at the June 19 board meeting.
- Why
- To ensure every investor records their nomination preference, streamline the transfer of securities, and reduce complications for family members or legal heirs after the investor's death.
Key facts
- Regulator
- Securities and Exchange Board of India (SEBI)
- Effective Date
- September 1, 2026
- Rule Change
- Nomination mandatory for single-holder demat accounts and MF folios; signed opt-out declaration allowed
- Maximum Nominees
- Up to three, with specified percentage shares
- Joint Accounts
- Nomination optional; consent of all joint-holders required
- QTP Claim Limits
- Up to ₹10,000 for physical holdings and ₹30,000 for dematerialised holdings
- Simplified Documentation Limits
- Doubled to ₹10 lakh per listed company (physical) and ₹30 lakh per beneficial owner (dematerialised)
- If No Nominee
- Holdings transferred to legal heirs via the securities transmission facility
Quotes
Securities and Exchange Board of India (SEBI)
Regulatory body issuing the rule change
““enhance the ease of investor onboarding and ease the nomination process.””
livemint.com
Sources
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