Sebi Eases Capital Market Norms for Investors

Capital markets regulator Sebi has relaxed rules for existing investors by eliminating the requirement to freeze demat accounts and mutual fund folios for failing to provide a 'choice of nomination'. This decision aims to ease compliance and investor convenience. Payments withheld for non-nomination will now be processed.

In a groundbreaking move, the capital markets regulator Sebi announced on Monday a significant relaxation of rules for existing investors. The elimination of the norm that mandated freezing demat accounts and mutual fund folios due to non-submission of a 'choice of nomination' marks a notable shift aimed at easing investor compliance.

This regulatory change permits investors holding securities in physical form to receive any due payments—dividends, interest, or redemption payments—and to lodge grievances or submit service requests to the RTA even without submitting a 'choice of nomination'.

Sebi had initially set a June 30, 2024 deadline for all individual mutual fund holders to either nominate or opt out of nomination, failing which their accounts could be frozen. However, based on market representations, Sebi has now declared that such non-compliance will no longer result in frozen demat accounts or mutual fund folios.