Udaipur, December 6, 2024 – The Securities and Exchange Board of India (SEBI) has issued new rules related to nominations in securities (or brokerage) matters, including Demat and Mutual Fund accounts.

Under the new guidelines, if an investor is incapacitated or unable to manage their affairs, the nominee will be allowed to make financial decisions and be given full authority to operate Demat and Mutual Fund accounts.

This new rule came into effect from November 28, 2024.

While these amendments are expected to increase process efficiency, SEBI has also established particular security requirements to guard against fraud and abuse, thereby safeguarding the interests of the nominee and investor.

Points to remember:

1. It is mandatory for every participant or investor to nominate a person as the beneficiary.
2. The investor will have the option to nominate a person who will officially be approved to carry out transactions on behalf of the former in case he/she has become incapacitated.
3. SEBI has simplified the process for transferring assets to the nominee with the goal to reduce paperwork and speed up the procedure.

The Depositories and Participants regulations have also been modified in order to implement these changes. 

Source: Media Reports