SEBI Scraps Mandatory Choice Of Nomination For Existing Investors

Posted On - 27 June, 2024 • By - King Stubb & Kasiva

Basis the representations received from the market participants, for ease of compliance and investor convenience, SEBI has decided the following in respect of existing investors/unitholders through circular dated June 10, 2024 bearing No.: SEBI/HO/MIRSD/POD-1/P/CIR/2024/81:

  1. non-submission of ‘choice of nomination’ shall not result in freezing of demat accounts as well as mutual fund folios;
  2. security holders holding securities in physical form shall be eligible for receipt of any payment including dividend, interest or redemption payment as well as to lodge grievance or avail any service request from the RTA even if ‘choice of nomination’ is not submitted by such security holders.
  3. payments including dividend, interest or redemption payment withheld presently by listed companies/RTAs, only for want of ‘choice of nomination’ shall be processed accordingly.

However, all new investors are mandatorily required to provide ‘choice of nomination’ for demat accounts/MF folios (except for joint holding accounts or folios). Meanwhile, all existing investor/unitholders are encouraged to provide their ‘choice of nomination’ in their own interest for ensuring smooth transmission of securities held by them and for prevention of accumulation of unclaimed assets in the securities market.