Nomination for Mutual Fund Unit Holders
Summary
This circular mandates that new mutual fund unit holders subscribing on or after August 1, 2022, must either provide a nomination or opt out via a signed declaration. Asset Management Companies are required to facilitate both physical and online submission methods for these forms, ensuring adequate e-Sign infrastructure. Existing individual unit holders were given a deadline of March 31, 2023, to regularize their nomination status, with non-compliance resulting in the freezing of folios for debits.
Text
Investors subscribing to mutual fund units on or after August 1, 2022, shall have the choice of: a. Providing nomination in the format specified in fourth schedule of SEBI (Mutual Funds) Regulations, 1996 (or) b. Opting out of nomination through a signed Declaration form as provided in Annexure - A to this circular.
AMC shall provide an option to the unit holder(s) to submit either the nomination form or the declaration form for opting out of nomination in physical or online as per the choice of the unit holder(s). In case of physical option, the forms shall carry the wet signature of all the unit holder(s) and in case of online option, the forms shall be using e-Sign facility recognized under Information Technology Act, 2000, instead of wet signature(s) of all the unit holder(s).
All AMCs shall ensure that adequate systems are in place for providing the e- Sign facility and take all necessary steps to maintain confidentiality and safety of client records.
All the AMCs are advised to set deadline as March 31, 2023 for nomination / opting out of nomination for all the existing individual unit holder(s) holding mutual fund units either solely or jointly as mentioned at para 1 above, failing which the folios shall be frozen for debits.
This circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provision of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Nomination for Mutual Fund Unit Holders. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.