SEBI Proposes Default Nomination in Demat & Mutual Fund Folios

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  • Last Updated on 19 March, 2026

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SEBI nomination norms

Consultation Paper; Dated: 17.03.2026

The Securities and Exchange Board of India (SEBI) has released a consultation paper proposing revisions to the nomination framework for demat accounts and mutual fund folios. The proposals aim to simplify processes and improve investor participation in nomination.

1. Nomination to Become Default Option

SEBI has proposed that nomination should be the default choice for all single-holder demat accounts and mutual fund folios opened after a specified date.

  • Investors will be automatically guided towards providing nominee details
  • This is intended to increase the adoption of nomination and reduce unclaimed assets

2. Mandatory ‘Opt-Out’ Selection

For investors who do not wish to nominate:

  • They will be required to explicitly select an ‘opt-out of nomination’ option

This ensures that the absence of nomination is a conscious and recorded decision, rather than an omission.

3. Simplification of Nominee Details

SEBI has also proposed to reduce the information required for a nominee.

Under the revised proposal, only the following details would be mandatory:

  • Name of the nominee
  • Nature of relationship with the investor

This simplification is expected to make the nomination process faster and more user-friendly.

4. Objective of the Proposal

The proposed changes aim to:

  • Increase nomination coverage across investment accounts
  • Reduce the incidence of unclaimed financial assets
  • Simplify onboarding and compliance requirements
  • Strengthen investor protection and ease of transmission

5. Next Steps

As this is a consultation paper, SEBI has invited comments from stakeholders. The final framework will be issued after considering feedback from market participants and the public.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied