2. SEBI has released a consultation paper seeking public comments on the revised nomination framework.
3. The regulator proposes making nomination the default option while opening demat accounts and mutual fund portfolios.
4. Investors who opt out of nomination will need to explicitly confirm their choice through a declaration.
5. SEBI suggests reducing mandatory nominee details to only the name and relationship of the nominee.
6. Other details such as address, mobile number, email, and percentage share will be optional.
7. If a nominee’s share is not specified, the assets will be distributed equally among the nominees.
8. SEBI proposes allowing a maximum of four nominees for demat accounts and mutual fund folios.
9. An earlier proposal to increase the number of nominees to ten has been reconsidered due to operational concerns.
11. Regulated entities will be required to send periodic reminders via SMS and email to investors who have not registered a nominee.
12. SEBI invites public comments on the proposed changes until April 7, 2026.
13. The revised norms aim to simplify investor onboarding and reduce unclaimed assets.
Why are these changes necessary?
The main objective of SEBI is to make ‘Ease of Investing’, i.e. investment easier.
Such as less paperwork: Requiring less information will make account opening faster and easier for new investors.
Since nomination becomes easier, more people will fill it, which will eliminate legal hurdles in the investor’s family getting the money after their demise.
Investors who have not yet made a nomination will be reminded from time to time through SMS and email.
The proposal also states that if an investor becomes physically incapacitated, a power of attorney (PoA) can be used instead of allowing a nominee to manage the account. This is an important security measure.
SEBI has sought comments from the public and stakeholders on these changes by April 7, 2026. These rules will then be finalised.
