SEBI Proposes Default Nomination For Demat And MF Accounts, Eases Compliance Norms
Last Updated: 18th March 2026 - 03:45 pm
Summary:
SEBI is planning to make nomination a default requirement in demat accounts and mutual fund portfolios. In addition, SEBI is planning to simplify the requirements related to the nomination and compliance process, as per a consultation paper.
The Securities and Exchange Board of India is planning to change the nomination requirements related to demat accounts and mutual funds. SEBI has released a consultation paper on March 17, 2026.
Default Nomination For New Accounts
Under the new proposal, investors opening new demat accounts or mutual fund folios would be automatically given the facility of nomination, and those not wishing to avail of the facility would be required to opt out.
The move is aimed at reducing delays and procedural gaps observed in account handling where nomination details are not provided.
Simplified Nominee Details
SEBI has proposed reducing the information required for nomination. Only the nominee’s name and relationship with the investor will be mandatory, while other details will remain optional.
The regulator has also proposed that the number of nominees should not exceed four for each account or folio.
Access Framework For Investors
In situations where investors cannot access their accounts due to their incapacity, SEBI has proposed that access should be granted through a power of attorney instead of allowing access through nominees.
This is proposed so that there is clear demarcation between nominees and operators.
Background And Consultation Timeline
The proposals have been based on the operational issues that have been identified in the existing nomination system, which include inconsistencies in documentation and delays in processing.
The SEBI has invited public comments on the consultation paper. The last date for receipt of comments is April 7, 2026.
The proposals are expected to be applicable to both demat accounts and mutual fund folios. The proposals aim at standardising nominations across all investment products.
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