The Securities Exchange Board of India (SEBI) on May 29, 2026, notified regarding the Ease of Doing Business - Modified Norms for Nomination in Demat Accounts and Mutual Fund Folios.
The following has been stated:
• SEBI has revised the nomination framework for demat accounts and mutual fund folios to simplify investor onboarding, address operational challenges, and reduce the creation of unclaimed assets. Effective September 01, 2026, nomination will be mandatory for all new single-holder accounts and folios, unless the investor formally opts out through a prescribed declaration. For jointly held accounts/folios, nomination will remain optional, but any nomination or change thereto will require the consent of all joint holders.
• Investors will be allowed to nominate up to three persons and can submit, modify, or cancel nominations any number of times through either online or offline modes. Online nominations may be authenticated through digital signatures, Aadhaar-based e-sign, other legally recognized e-sign methods, or two-factor authentication (2FA). Offline nominations will require only the account holder’s signature, with witnesses needed only in cases of thumb impressions.
• The revised framework requires only the nominee’s name and relationship as mandatory information, while details such as contact information, percentage share, and identity documents are optional. Investors who choose not to nominate must submit an opt-out declaration acknowledging the potential delays and complications in transmission of assets to legal heirs and the possibility of unclaimed assets being transferred to the Investor Education and Protection Fund (IEPF).
• SEBI has also placed obligations on Depository Participants and Mutual Fund RTAs to provide acknowledgements for nomination requests, display nomination status in account statements, and periodically remind investors without nominations through emails, SMSs, and platform pop-ups.
[Notification no. - SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2026/12676]
