SEBI Eases Nomination Norms for Demat Accounts and MF Folios

Circular no. SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2026/12676; Dated: 29.05.2026

The Securities and Exchange Board of India (SEBI) has relaxed nomination norms for demat accounts and mutual fund folios by simplifying procedures and easing documentation requirements to reduce unclaimed investor assets and improve succession-related processes.

The revised framework introduces mandatory nomination for specified accounts, simplified disclosure requirements and greater flexibility for investors to modify nominations.

1. Nomination Mandatory for Single-Holder Accounts From September 1, 2026

Under the revised norms, nomination shall be mandatory for:

• Single-holder demat accounts; and
• Single-holder mutual fund folios

opened on or after September 1, 2026.

However, investors may choose not to nominate a person by submitting a prescribed opt-out declaration form.

2. Nomination Continues to Be Optional for Joint Accounts and Folios

For jointly held demat accounts and mutual fund folios, nomination shall continue to remain optional.

Where nomination is made or modified in a jointly held account or folio, consent of all joint holders shall be mandatory, irrespective of the mode of operation.

3. Mandatory Information Required in Nomination Form

SEBI has prescribed certain information that must mandatorily be captured in the nomination form.

This includes:

• Name of the nominee
• Nature of relationship between nominee and investor

In addition, date of birth shall be mandatory where the nominee is a minor.

4. Optional Information in Nomination Form

The following details have been made optional:

• Mobile number of nominee
• Email address of nominee
• Percentage share of each nominee
• KYC details or identifier of nominee
• Guardian details where nominee is a minor

The flexibility seeks to simplify nomination formalities while retaining essential identification details.

5. Equal Apportionment Where Percentage Share Is Not Specified

SEBI has clarified that where the percentage share of each nominee is not specified, assets in the account or folio shall be distributed equally among nominees.

Further:

• Any odd lot arising after division shall be transferred to the first nominee mentioned in the nomination form.

This clarification seeks to reduce ambiguity in succession and asset transfer processes.

6. Unlimited Modification or Cancellation of Nomination Permitted

Investors may:

• Change nominations;
• Modify nominee details; or
• Cancel nominations

any number of times.

The revised framework provides greater flexibility to investors in managing succession-related preferences.

7. Mandatory Acknowledgement by Regulated Entities

SEBI has mandated that regulated entities shall provide acknowledgement to investors for:

• Initial nomination;
• Subsequent modification; or
• Cancellation of nomination

This requirement is intended to improve transparency and recordkeeping.

8. Objective of the Revised Norms

The revised framework aims to simplify nomination procedures, reduce documentation burden and minimise unclaimed investor assets arising due to absence of nomination or succession-related disputes.

By making nomination mandatory for new single-holder accounts and easing procedural requirements, SEBI seeks to improve investor protection, facilitate smoother transmission of assets and strengthen market efficiency.

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