Attention Mutual Fund Holders: Specify Nominee Details By This Date Or Face Consequences

Pic courtesy ClearTax Chronicles

Mumbai: The deadline for notifying nominee details in mutual funds (MF) is approaching.

Anyone who holds mutual fund units will have to register nominee/s by March 31, 2023. Failure to meet the deadline will lead to investments being frozen and unit holders won’t be able to make any kind of transacts – redeem, switch or add more units.

In a circular in June 2022, Securities and Exchange Board of India (SEBI) had made nomination mandatory for existing mutual fund folios, including jointly-held ones, and made it compulsory for new MF unitholders to submit nomination form or declare they are opting out of nomination.

An individual mutual fund unitholder can nominate a person to claim his/her funds or redemption proceeds in case he/she expires.

If units are held jointly by more than one person, all joint unitholders can nominate a person to whom rights in the units would transfer upon their death. They can also opt out of nomination.

There are multiple channels for investors to complete the process of nomination, if not already done.

Asset Management Companies (AMCs) have been directed to provide both online and offline facility to unitholders for notifying their nominees or opt out of nomination.

Unitholders can also submit their choices in a specified form either with the particular fund house, registrar or transfer agents.

Nominations can also be changed in accounts held with online platforms or by writing to the fund house.