SEBI’s recent announcement states that Demat accounts and mutual fund portfolios will remain unaffected and will not be frozen due to the non-submission of nominations.
The decision to make these changes was taken after considering representations received from market participants. This move aims to enhance ease of compliance and investor convenience, as stated in a circular by the market’s regulator.
Security holders can also receive dividend, interest, or redemption payment, as well as lodge grievances or avail any service request, even if the ‘choice of nomination’ is not submitted, SEBI wrote. Additionally, SEBI mentioned that payments, including dividend, interest, or redemption payments, which are currently withheld due to missing nomination details, shall be processed accordingly.
However, despite this relaxation, the selection of a nominee remains compulsory for fresh investors, with the exception being Demat Accounts and Mutual Fund portfolios held jointly. SEBI has mandated that depositories and asset management companies (AMCs) must regularly reach out to customers via email or SMS every two weeks to collect nomination particulars.
SEBI, the Securities and Exchange Board of India, had announced an extension of the deadline until June 30, 2024, allowing mutual fund investors ample time to complete their nominations. This decision was made in December of the previous year, providing investors with a clear timeline to ensure their nominations were processed smoothly.