Investors subscribing MFs from Aug to get choice of providing nomination: Sebi

Capital markets regulator Sebi on Wednesday said investors, who are subscribing to mutual fund units from August 1, will have the choice of providing nomination or opting out of the nomination.

Also, the regulator has issued a format for nomination form and opting out of nomination through a 'declaration form' in this regard, according to a circular.

Further, Asset Management Companies (AMCs) have been asked to set the deadline as March 31, 2023, for nomination or opting out of a nomination for all the existing individual unit holder(s) holding mutual fund units either solely or jointly, failing which the folios will be frozen for debits.

Under the new framework, AMC will have to provide an option to the unit holder(s) to submit either the nomination form or the declaration form for opting out of the nomination physically or online as per the choice of the unit holder(s).

In the case of a physical option, the forms will carry the wet signature of all the unit holder(s) and in the case of the online option, the forms will be using an e-sign facility instead of the wet signature(s) of all the unit holder(s).

AMCs have been asked to ensure that adequate systems are in place for providing the e-sign facility and they need to take all necessary steps to maintain the confidentiality and safety of client records.

The move is aimed at bringing uniformity in practices across all constituents in the securities market.

Last year, Sebi gave a similar choice for investors who were opening new trading and Demat account. 

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)