Nomination for Eligible Trading and Demat Accounts
Summary
This circular mandates that investors opening new trading and demat accounts on or after October 1, 2021, must choose to provide a nomination or opt out. Existing eligible account holders are required to make this choice by March 31, 2022, failing which their accounts will be frozen. Intermediaries are directed to implement these provisions and ensure adequate systems for e-signatures and record safety.
Text
Section 72 of Companies Act, 2013 provides for nomination by a holder of securities.
Investors opening new trading and or demat account(s) on or after October 01, 2021, shall have the choice of providing nomination or opting out nomination
Trading Members and Depository Participants (hereinafter, intermediaries), shall activate new Trading and Demat accounts from October 01, 2021, only upon receipt of above formats.
The nomination and Declaration form shall be signed under wet signature of the account holder(s) and witness shall not be required. However, if the account holder(s) affixes thumb impression (instead of wet signature), then witness signature shall be required in the forms.
The on-line nomination and Declaration form may also be signed using e-Sign facility and in that case witness will not be required.
Intermediaries shall ensure that adequate systems are in place including for providing for eSign facility and also take all necessary steps to maintain confidentiality and safety of client records.
all existing eligible trading and demat account holders shall provide choice of nomination as per the option given in paragraph 2 above, on or before March 31, 2022, failing which the trading accounts shall be frozen for trading and demat account shall be frozen for debits.
The Stock Exchanges, Depositories and intermediaries are directed to: take necessary steps to implement the provisions of this circular... bring the provisions of this circular to the notice of their respective constituents... communicate to SEBI, the status of the implementation... monitor the compliance of this circular
This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of SEBI (Stock Broker) Regulations, 1992 and SEBI (Depositories and Participants) Regulations, 2018
Source: SecMarx — Nomination for Eligible Trading and Demat Accounts. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.