Modified Norms for Nomination in Demat Accounts and Mutual Fund Folio

Modified Norms for Nomination in Demat Accounts and Mutual Fund Folio

SEBI has modified Norms on Nomination to be implemented by regulated entities for Demat Accounts and Mutual Fund Folios w.e.f. September 01, 2026

Default choice of nomination:

For all single accounts / folios opened on or after the date of implementation  of this Circular, the investor shall mandatorily provide nomination, unless declaration form for ‘opt-out’ is submitted as per format mentioned in the Circular.

Nomination will be optional for jointly held demat account/ folios.

The consent of all the joint-holders shall be required for providing or changing nominee regardless of mode of operations.

Number of nominees:

Investors can provide up to 3 nominees.  

In case of multiple nominees, upon the demise of the investor, the nominees may either continue in the same account / folio or open separate account / folio, for their respective holding

Mode of providing Nomination:

The regulated entities shall make the nomination form available to the investors as per the format provided in Annexure.

The investors shall have an option to submit the nomination either online or offline.

For Online nomination

Regulated entities offering online mode for nomination shall provide the facility as per the format in Annexure-A. Validation shall be through: 

• Digital Signature Certificate; or
• Aadhaar-based e-sign or by using any other e-sign facility recognized under Information Technology Act, 2000; or 

• Two factor authentication (2FA) in which one of the factors shall be a One-Time Password (OTP) sent to the registered mobile number and email address of the investor.

For physical / offline nomination-

The nomination form shall be signed under wet signature of the account / folio holder and signature of witness shall not be required. However, if the account / folio holder affixes his / her thumb impression (instead of wet signature), then the same shall be witnessed by two persons and details of such  witnesses  (name  and  address)  shall  be  duly  captured  in  the nomination form. 

Information to be captured in nomination form:

Mandatory information – Name of nominee and the nature of relationship of the nominee with the investor. Date of birth is mandatory, in case the nominee is a minor.

Optional information- contact details of nominee like mobile number, e-mail address, percentage share of each nominee, KYC / identifier of the nominee and details of the guardian, if the nominee(s) is / are minor/s. 

Where the percentage share of each nominee is not specified, the assets in the account / folio shall be apportioned among the nominees equally. Any odd lot after division shall be transferred to the first nominee mentioned in the form.

The regulated entities shall facilitate the investors, who choose to key-in / fill-in all or any or none of optional information, to do so by providing all the fields in sub-paragraph  7 b. above,  in the nomination  form (both online  and offline mode).  

Opt-out of nomination:

Investors may opt-out of nomination by:

(a) Filling up the declaration form for ‘opt-out’ as per format provided in Annexure-B ; or

(b) Choosing the ‘opt-out’ option online; the regulated entity shall display the declaration message in Annexure-B. The investor shall have to agree by choosing this option to proceed ahead, without nomination. 

Changes or cancellation of nomination:

Investors can provide, changes or cancel nominations any number of times.

The forms in Annexure A and B would also be applicable for any subsequent change/cancellation of nomination and also for existing investors. 

Regulated entities shall provide acknowledgement to the investor for each and every instance of nomination / subsequent change.

Obligations of the regulated entities:

In the periodic statement of account / holding statement furnished to the investor, the regulated entity shall print, either;

(a) name(s) of the nominee(s) or

(b) Yes / No – whether or not nomination has been made by the investor

as per the choice exercised by investor in the nomination form.

For  existing and newly opened accounts / folios, without nomination (including opt-outs), the Depository Participants/ Mutual Fund RTAs shall:

1. Send bi-annual messages to such investors by way of emails and SMS, nudging and guiding them to provide nomination   
2. Cause to display of pop-up message on the benefits of nomination, on the web / mobile application / platform, on the first log-in of the day in to the account. 

Provided that the messages and the pop-ups shall not be sent/ displayed to the investors who have provided the nomination. 

The foregoing clauses shall be applicable mutatis-mutandis for existing accounts and folios also.   

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