New Delhi, February 28 – The Securities and Exchange Board of India (SEBI) has introduced modifications and issued clarifications regarding nomination facilities in the securities market. The move aims to streamline the process of transmission and nomination for demat accounts and mutual fund (MF) folios.
According to SEBI’s latest circular, if one or more joint account holders pass away, the assets will automatically be transferred to the surviving holders without requiring additional Know Your Customer (KYC) documentation, unless it was previously requested but not provided. The surviving holders will also have the flexibility to update their contact details and modify their nominees at any time.
Furthermore, investors will now have the option to appoint a nominee—excluding minors—who can manage their account in case they become physically incapacitated. This nominee can be changed as required.
For single-holding accounts, SEBI has clarified that investors can opt out of nomination either online or offline. Additionally, the nomination form has been revised to specify that any odd lot after asset division will be allocated to the first nominee. For non-resident investors (NRIs), passport numbers will now be accepted as valid identification.
In the event of an investor’s death, nominees can claim assets and either continue as joint holders with other nominees or open separate accounts.
Phased Implementation from March 1
The revised guidelines will be implemented in three phases, with the initial rollout beginning on March 1, 2024. Additional guidelines will be enforced from June 1 and September 1. SEBI had earlier allowed investors to nominate up to 10 persons in their demat accounts and mutual fund folios starting March 1, 2024. Investors can also allocate specific percentages of their investments to different nominees, ensuring a fair and dispute-free distribution of assets to rightful heirs.SEBI’s New KPI Disclosure Framework for Issuer Companies
In a separate circular, SEBI has mandated that issuer companies and merchant bankers adhere to industry standards when disclosing Key Performance Indicators (KPIs) in offer documents.Effective from April 1, 2025, this circular applies to all draft and final offer documents submitted to SEBI or stock exchanges. The Industry Standards Forum (ISF), comprising ASSOCHAM, CII, and FICCI, has collaborated with SEBI to develop these industry standards for KPI disclosures. The finalized standards will be available on the websites of industry associations and stock exchanges.
These regulatory updates reflect SEBI’s continued efforts to enhance transparency, streamline investment processes, and provide greater clarity to investors in the securities market.