SEBI Proposes Default Nomination in Demat & Mutual Fund Folios

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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