Sebi to not freeze MF portfolios, demat accounts over non-submission of nominee

nvestors will be able to avail any service request from their mutual fund registrar and transfer agent (RTA), even if 'choice of nomination' has not been submitted by those unit holders.

Market regulator Sebi has issued a circular on June 10 stating that it will not freeze the mutual fund portfolios and demat accounts of investors for non-submission of nomination.

The decision - for existing investors and unitholders - has been taken based on representations from the market participants, citing need for ease of compliance and investor convenience. Investors holding securities in physical form shall be eligible for receipt of dividend, interest payment or redemption payment, as well as to lodge grievance, Sebi's circular said.

SEBI had last year in December extended the deadline until June 30, 2024 for mutual fund investors to complete/update their nominations.

Investors will be able to avail any service request from their mutual fund registrar and transfer agent (RTA), even if 'choice of nomination' has not been submitted by those unit holders.

However, all new investors/unitholders shall be required to mandatorily provide the 'Choice of Nomination' for demat accounts and mutual fund folios, except for jointly held Demat accounts as well as mutual funds.

The formats for providing nomination details or to opt out of nomination has been shared in the circular.

The Sebi cirular has urged all existing investors and unit holdersare to provide ‘choice of nomination’ in their own interest. This will ensure 'smooth transmission of securities held by them as well as to prevent accumulation of unclaimed assets in securities market'. Fortnightly communication through SMS and emails will be sent out to those investors and unit holders who have not provided the‘choice of nomination’ yet. A pop-up shall also be provided on web/mobile application to investors by their Depositories while logging into the demat accounts, Sebi added.