SEBI Changes Nomination Rules From 1 September: What Demat And Mutual Fund Investors Should Know
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SEBI’s new rules from 1 September 2026 allow investors to name up to three nominees. The rules also add an opt-out option and make the nomination process simpler for demat accounts and mutual funds. Read more.
The Securities and Exchange Board of India (SEBI) will bring its new nomination rules into effect from 1 September 2026. Under the new rules, investors can name up to three nominees for each demat account or mutual fund folio.
For single-holder accounts opened on or after 1 September, investors will have to either add a nominee or formally opt out of the nomination facility.
SEBI introduced the changes to make nominations easier and reduce problems related to the transfer of investments after an investor’s death. The regulator said the revised framework is also aimed at preventing the build-up of unclaimed assets.
What Changes For Investors From 1 September?
Under the revised rules, a single-holder demat account or mutual fund folio cannot be left without a recorded nomination choice. Investors can name up to three nominees and can change or cancel their nominations any number of times. If the percentage share is not specified, the assets will be divided equally among the nominees. Any odd lot left after the division will go to the first nominee listed.
Nomination will remain optional for jointly held demat accounts and mutual fund folios. However, all joint holders will have to give their consent when a nomination is added or changed.
Investors can complete the process online or offline. Online requests can be authenticated through a digital signature, Aadhaar-based e-sign, or two-factor authentication using OTPs sent to the registered mobile number and email address. For offline forms, a normal signature will not need a witness. A thumb impression, however, will have to be witnessed by two people.
Investors who do not want to appoint anyone can choose the opt-out option. The declaration can be submitted physically or selected online, depending on the facility provided by the broker, depository participant, mutual fund, or registrar.
How Can Investors Add A Nominee?
For a demat account, investors can usually log in to their broker’s website or app. From there, they can go to Profile. Next, select Account and then click on Nomination. They can select the option to add a nominee, enter the nominee’s name and relationship, provide other required details and complete OTP or e-sign verification.
The exact steps can differ between brokers. Investors should check their nomination status after submitting the request.
Mutual fund nominations, especially those held as a folio, can generally be updated through the concerned asset management company or registrar and transfer agent. Investors should keep their folio and PAN details ready before starting the process.
The changes are part of SEBI’s wider effort to make transmission of investments simpler. In June, the regulator also approved a Quick Transmission Processing (QTP) facility for small claims of up to ₹10,000 for physical holdings and ₹30,000 for dematerialised holdings.
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This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, visit www.kotakneo.com/disclaimer.
Vishwa is a content and SEO strategist with 10+ years of experience across fintech and FMCG. She has a knack for connecting dots others miss, spotting trends early, and finding angles on topics most miss to question.
At Kotak Neo, she drives content strategy for neoshorts, Kotak News Desk, and Investing Guide.
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