SEBI has revised the nomination rules for demat accounts and mutual fund folios to make the investment process simpler and to reduce the number of unclaimed assets. The new rules will come into effect from September 1, 2026.
Nomination Mandatory for Single Accounts
For all new single-holder demat accounts and mutual fund folios opened after the implementation of the circular, investors must provide a nominee. However, investors can choose not to nominate anyone by submitting an opt-out declaration form.
For jointly held accounts and folios, nomination will remain optional. Any addition or change of nominee in a joint account will require the consent of all joint holders.
Up to Three Nominees Allowed
Investors can nominate up to three persons in a demat account or mutual fund folio. If there are multiple nominees, they can either continue with the same account after the investor’s death or open separate accounts for their respective share of the holdings.
Online and Offline Nomination Facility
Investors can submit nomination details either online or offline.
For online nomination, verification can be completed through:
- Digital Signature Certificate (DSC)
- Aadhaar-based e-sign
- Any other legally recognized e-sign facility
- Two-factor authentication (2FA) using OTP sent to the registered mobile number and email address
For offline nomination, investors need to sign the form physically. No witness is required for a normal signature. However, if the investor uses a thumb impression instead of a signature, two witnesses must certify it and provide their names and addresses.
Information Required in the Nomination Form
The nomination form must include:
- Name of the nominee
- Relationship of the nominee with the investor
If the nominee is a minor, the date of birth must also be provided.
Investors may also provide optional details such as:
- Mobile number
- Email address
- Percentage share of each nominee
- KYC or identification details
- Guardian details in case of minor nominees
If the percentage share is not specified, the holdings will be divided equally among all nominees.
Option to Opt Out of Nomination
Investors who do not wish to appoint a nominee can submit an opt-out declaration form or select the opt-out option online after accepting the required declaration.
Nomination Can Be Changed Any Time
Investors can add, modify or cancel nominations any number of times. The same forms can be used for future changes and also by existing investors. Every nomination request or change must be acknowledged by the concerned institution.
New Responsibilities for Depository Participants and Mutual Fund RTAs
The names of nominees, or a simple Yes/No indication of whether nomination has been made, will be displayed in account or holding statements as per the investor’s choice.
For accounts without nomination, including those where investors have opted out, Depository Participants and Mutual Fund Registrars and Transfer Agents (RTAs) must:
- Send reminder emails and SMS messages twice a year encouraging investors to add a nominee.
- Display a pop-up message explaining the benefits of nomination when the investor logs into the account for the first time each day.
These reminders will not be shown to investors who have already completed the nomination process.
Effective Date
The revised nomination rules will come into force on September 1, 2026. All depositories, depository participants, mutual fund companies and RTAs will be required to update their systems and processes before the implementation date.
Click here to download SEBI Nomination Circular and Nomination Form PDF
