The Securities and Exchange Board of India (SEBI) has introduced new rules to provide relief to investors in the stock market and mutual funds.
These rules focus on the role of nominees in demat accounts and mutual fund investments.
Under these new rules, if an investor is unable to make decisions due to incapacity or other reasons, the nominee will be allowed to take financial decisions on their behalf.
This will give nominees full rights to operate the investor’s demat and mutual fund accounts. The new rules took effect on November 28.
Key Benefits for Investors and Nominees
Mandatory Nomination: Every investor will now need to nominate a person to handle their shares and securities in case of their death.
Nominee’s Power to Transact: If the investor is unable to make decisions, the nominated person will be authorized to handle transactions in their place.
Multiple Nominees: Investors can nominate up to 10 people in their demat accounts and mutual funds, up from the previous limit of 3.
Flexibility in Changing Nominees: Investors can change their nominees as many times as they wish.
Convenience for Families: Investors will also have the option to operate family members’ trading accounts using a single mobile number.
Nominee’s Role and Requirements
Nominees will act as trustees for the legal heirs of the investor. To fulfill this role, nominees will need to provide documents such as PAN, passport number, or Aadhaar for verification.
