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As per SEBI rules, mutual fund investors must have nominees in their folios by 1st October 2023 or explicitly opt out. Otherwise they will face restrictions in selling units.
Update: As on 27-Sep-2023, the deadline has been pushed to 31-Dec-2023 from 30-Sep-2023.
Having a nominee in your mutual funds will make transmission easier in case the investor dies.
Join the Arthgyaan WhatsApp community: You can stay updated on our latest content and learn about our webinars. Our community is fully private so that no one, other than the admin, can see your name or number. Also, we will not spam you.In case of absence of nomination, the legal heirs will have to produce additional documentation like a succession certificate which might make the process lengthy and cumbersome.
It might also happen, and this is very common, that the family does not have any clue what investments are there and how to access them. In a future article, we will cover the best way to make a list of assets and share them with family members to avoid such a situation.
Only the legal heir get the units eventually after the investor’s death. The nominee is just the executor of the estate but may not necessarily be the legal heir.
As per the AMFI notification, those folios will not be allowed to sell any units either as a redemption or a switch out.
As per the AMFI notification, you can either update the nominee details in mutual fund portfolios, or explicitly opt out. Since one folio might have multiple mutual funds in it, you need to update only on a per-folio basis and not on a per-fund basis.
There are multiple ways to update the nomination:
CAMs and KFintech websites offer the facility to update nominees or opt out fully online. We will not give the direct links here, to avoid phishing or stale links, but you can use Google search:
In this method you need to remember which AMCs are with CAMs and which are with KFintech and act accordingly. The easier on-stop method is described below.
MFCentral offers all mutual funds serviced by both CAMs and KFintech. You can seee all folios mapped to MFCentral and update them in one place.
If you have invested in mutual funds via your demat account, for example with Zerodha Coin, please login to your demat account to check the nomination. The same nomination for stocks will be carried over to your mutual fund units.
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This post titled Why you must complete your mutual fund nominations before 1st October 2023? first appeared on 24 Sep 2023 at https://arthgyaan.com
