SEBI extends Dec 31 deadline for mutual fund and demat account nomination

As per a circular issued on December 27, SEBI has extended the last date for nomination to June 30, 2024.

With barely a few days left for the December 31 deadline for mutual fund (MF) and stock market investors to complete nomination for their investments, the securities market regulator SEBI yet again extended this deadline.

As per a circular issued on December 27, the regulator has extended the last date to June 30, 2024. By this date, investors must either choose a nominee/s or explicitly opt out of nomination by submitting a declaration.

“Based on representations received from the market participants, for ease of compliance and investor convenience, it has been decided to extend the last date for submission of ‘choice of nomination’ for demat accounts and  mutual  fund folios to June 30, 2024,” said the SEBI circular.

This is not the first time the deadline has been extended. Even a few months ago as the September 30 deadline approached, SEBI pushed this further to December 31. With many investor failing to complete their nomination on time, the deadline extension saves them from the problem of their MF folios or demat accounts being frozen for debits. That is,  investors would not be able to make redemptions/ withdrawals from their MF folios / demat accounts if they had failed to complete  the nomination process.

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

A nominee plays an important role in transmission - passing on assets to the next of kin after the investor's demise. In the absence of a nominee, the process of transmission can become very complex.