Sebi extends mutual fund nomination deadline to June 2024

Updating nomination in a jointly-held MF folio requires the consent of all the joint holders.

Thanks to Securities and Exchange Board of India's (SEBI) last-minute deadline extension on December 27, mutual fund (MF) investors have time until June 30, 2024 for completing/updating their MF nominations.

It was in June 2022 when the Securities and Exchange Board of India (SEBI) made nomination mandatory for all new MF investments made from August 1, 2022. The deadline for completing nomination for existing MF investments was fixed as March 31, 2023. Investors would have to either choose a nominee/s or opt out of the nomination by way of a signed declaration form by the set deadline.

Based on representation from the Association of Mutual Funds in India (AMFI), the deadline for compulsory nomination for all new investments was extended from August to October 2022. And then, as existing MF unitholders, especially those with jointly held investments, struggled to complete their nomination, the deadline was extended, first from March 31 to September 30 and then to December 31, 2023.

If you still haven’t completed your MF nominations, this week is your last chance to do so. Failure to do so would result in your MF folios being frozen for any debits. That is, you will not be able to redeem/make withdrawals from any of these folios but you can continue investing in them.

According to the registrar and transfer agent (RTA) CAMS, about 25 lakh PAN holders had not updated their nomination as of September-end 2023. An email sent to CAMS asking for the latest data remained unanswered.

So how can you update your MF nomination?

Singly-held folios updating nomination 

Updating nominations for singly held MF folios is fairly straightforward. You can select a nominee or update an existing nominee’s details, or opt out of nomination. This can be done online on CAMS, K-Fintech or MF Central, an online platform created by the two RTAs. With MF Central you can do this for all your folios across all fund houses, whether serviced by CAMS or KFintech.

If you are unable to do this online, you can submit physical nomination forms.

Updating nomination for jointly held folios 

As highlighted in our earlier article, many investors with jointly held MF folios (investment in the name of more than one person) have faced problems in updating their nominations online. This is because it requires the consent of all the joint holders. When done online, it requires all the joint holders to receive OTPs for authentication and when done via physical form submission, it requires the signatures of all the joint holders.

To be able to update nominations online on CAMS or KFinetch, the MF folio must have the contact details of all the joint holders. Alternatively, you can submit physical nomination forms at the CAMS and KFintech branches to get this done. Note that you cannot use MF Central to update nominations for jointly held folios.

Furthermore, as a new investor, you can also use Mutual Funds Utility (MFU), a platform backed by the MF industry and AMFI, to fill in your nomination details online or opt out of nomination. You can do this both for singly or jointly held folios. But if you are an existing investor, you can do this only via submission of physical nomination forms and not online.

Also read: Confused about which mutual funds to invest in? Check out MC30

Submitting physical forms 

Those with investments in only one fund house can download the nomination form from the website of that fund house or the relevant RTA and submit it to either of them. Those with investments across multiple fund houses can download the forms simply from the relevant RTA websites, and then submit them to the RTAs or each of the fund houses.

You can use one form for updating the nomination for up to three folios (with the same fund house) if you have chosen the same nominees for all three folios. For different nominees across different folios, you will have to use separate forms.

Also, if you decide to take the offline route, be careful about your signature. According to mutual fund distributors we had spoken with earlier, many forms were getting rejected because of signature mismatch as people’s signatures tend to change over time.