SEBI Modifies Nomination Norms For Demat Accounts And Mutual Fund Folios

The Securities and Exchange Board of India (“SEBI”), by circular dated 29.05.2026¹ , has modified the nomination framework applicable to demat accounts and mutual fund folios. The revised framework seeks to simplify investor onboarding and nomination procedures while reducing the incidence of unclaimed assets.

The key changes introduced by the circular are:

1. Nomination shall be mandatory for all single-holder demat accounts and mutual fund folios opened on or after 01.09.2026, unless the investor expressly opts out. Nomination shall remain optional for jointly held accounts and folios. For jointly held accounts and folios, the consent of all joint holders shall be required for providing or changing a nomination, irrespective of the mode of operation.
2. Investors may nominate up to 3 (three) nominees and may modify or cancel nominations any number of times
3. iii. Where multiple nominees are appointed and the percentage share of each nominee is not specified, the holdings shall be apportioned equally among the nominees. Any odd lot arising from such division shall be transferred to the first nominee named in the nomination form.
4. Nomination may be submitted through online or offline modes. Online nominations may be authenticated through DSC, e-sign or two-factor authentication, while witness signatures for physical nominations are no longer required except where a thumb impression is affixed.
5. The mandatory information required for nomination has been reduced to the nominee’s name and relationship with the investor. Details such as contact information, KYC particulars and guardian details (in case of minor nominees) have been made optional.

The circular will come into effect from 01.09.2026 and supersedes all earlier SEBI circulars relating to nomination in demat accounts and mutual fund folios.

Footnote

^{1 Ease of doing investments – Modified Norms for Nomination in Demat Accounts and Mutual Fund Folios.}

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