TaxTMI 
TaxTMI 
Revise and Revamp Nomination Facilities in the Indian Securities Market
X X X X Extracts X X X X
X X X X Extracts X X X X
....extent of aforesaid, are being revised. 2. This circular covers various aspects of nomination, grouped under two sections - i.e. Section A and B, to be complied by the entities addressed in this circular, hereinafter collectively referred to as Regulated entities, as follows; Section A: Reiteration of existing norms to ensure a uniform approach across Securities Market. 2.1. Rule of survivorship 2.1.1. In case of joint accounts / holdings, upon demise of one or more joint holder(s), the regulated entity shall transmit the assets held to the surviving holder(s) vide name deletion [ For Clarification see para 2.1 ] 2.1.2. The surviving member(s) shall receive the assets as owner(s) and not as a trustee. 2.1.3. Surviving joint holders shall be entitled to continue with, or change or cancel the nominations made previously. 2.1.4. The mode of operation (of the joint account), namely that of the first named holder OR anyone or survivor OR either or survivor basis OR joint, etc. shall be un affected by the rule of survivorship. 2.1.5. The norms applicable for operation of the account / folio shall be mutatis mutandis applicable for nomination. 2.2. Simultan....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the investor to submit nomination form either online or through physical / offline mode with the following guardrails; 2.10.1. Online nomination: the regulated entities shall validate the nomination through: a) digital signature certificate or b) aadhaar based e-sign or by using any other e-sign facility recognized under Information Technology Act, 2000; or c) two factor authentication (2FA) in which one of the factors shall be a One-Time Password sent to the registered mobile number and email address of the investor. 2.10.2. Physical / offline nomination: The regulated entity shall verify the signature(s) as per the mode of holding, while registering or changing nomination. Where an investor affixes his/her thumb impression on the nomination form, then the same shall be witnessed by two persons and details of such witnesses shall be duly captured in the nomination form. However, there shall be no such requirement of witnesses in case of nomination forms carrying wet / digital / e-sign signature of the investor^5. 2.11. Regulated entities shall provide acknowledgement to the investor for each and every instance, irrespective of the mode of no....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 10 persons in the account / folio. 3.3. Power of Attorney (POA) Holder(s) of the investor cannot nominate. 3.4. Upon transmission of joint account / folio, the nominees shall have the option to either continue as joint holders with the other nominees or open separate single account / folio for their respective portion. 3.5. Nominee to act on behalf of incapacitated investors [ For Clarification see para 2.3 ] 3.5.1. The regulated entity shall provide the investors having single holding /account / folio, the option to; a) empower, any one of the nominees (excluding minor nominee) to operate the investor's account / folio, if the investor is physical incapacitated, but still has the capacity to contract, b) specify either the percentage or absolute value of assets in the account/ folio that can be encashed by such nominee, c) change such mandate any number of times without any restriction. ^5[3.5.2. The provisions of Clause 3.5.1 shall be applicable for a joint account / folio in the event where all the holders are simultaneously incapacitated.] 3.6. Direction to AMCs / their RTAs and DPs: 3.6.1. The broad guidelines to be fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....k any other documentation including affidavits, indemnities, undertakings, attestations or notarizations from the nominee(s), (e) No claims in respect of such transmission shall subsist against regulated entities and any claim or contestation shall be only amongst the nominee(s) and the claimants without reference to regulated entities. 3.7.2. Transfer to Legal heir(s) / representatives from nominee(s): ^6[3.7.2.1] Regulated entities shall facilitate / extend co-operation to transfer assets from the nominee(s) to the legal heir(s) of an investor, as and when approached by either party. In this regard, the regulated entity shall obtain suitable declaration from the nominee(s) while effecting transmission, as follows; (a) I / We are receiving the assets of the deceased's demat account / MF folio as a trustee to his / her legal heir(s). (b) I / We shall extend all co-operation in transferring such assets to the legal heir(s) either suo moto or when approached by the latter. (c) The regulated entity legally and validly discharged upon transmission of assets to the nominee(s). In case I / We fail to discharge my / our liability, or if ther....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Opting-out of nomination shall continue to be as per Circular Ref. No. SEBI/HO/MIRSD/POD-1/P/CIR/2024/81 dated June 10, 2024, except that the same shall be allowed only as per paragraph 3.10 above. All other items in Circular Ref. No. SEBI/HO/MIRSD/POD-1/P/CIR/2024/81 dated June 10, 2024 shall continue to be in force. 6. Regulated entities shall implement / upgrade their systems for providing the above facility to the investors, including the nomination form in Annexure A. 7. This circular shall come into effect from March 01, 2025. 8. Upon implementation of this Circular, existing investors shall be given an opportunity to revise their choice of nomination. 9. Recognised Depositories are advised to take steps to make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of this circular. ^19[10. AMFI and Depositories shall furnish to SEBI: 10.1. the interim status of readiness of all their constituents to implement this circular, by May 01, 2025 and August 01, 2025. 10.2. confirmation that the formats of the 'nomination form' and the 'Opt-out' form of each of their respective constituents, both in physical and digital mod....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e 7 Nominee 8 Nominee 9 Nominee 10 *Joint Accounts Event Transmission of Account I Folio to Demise of one or more joint holder(s) Surviving holder(s) through name deletion The survivin holder s shall inherit the assets as owners Demise of all joint holders simultaneously - having nominee Nominee Demise of all joint holders simultaneously - not having nominee Legal heir(s) of the youngest holder ** If % is not specified, then the assets shall be distributed equally amongst all the nominees (see table in 'Transmission aspects') *** Provide only number: PAN or Driving Licence or Aadhaar (last 4). Copy of the document is not equired. ****to be furnished only in following conditions / circumstances: • Date of Birth (DOB): please provide, only if the no....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... asset shall continue to be with the AMC in case of MF units and with the concerned Depository in case of Demat account. • ^16[You have the option to designate any one of your nominees to operate your account / folio, in case of your physical incapacitation, at any point of time and not just during opening of account / folio.]. This mandate can be changed any time you choose. • ^17[The signatories for this nomination form shall be as per mode of holding in the folio(s) / demat account(s) i.e. • 'Either or Survivor' Folios / Accounts - any one of the holder can sign • 'First holder' Folios / Accounts - only First holder can sign • 'Jointly' Folios / Accounts - all holders have to sign • In this regard, the regulated entity shall include in the respective account opening form, the additional information that in case of 'Either or Survivor' folios / accounts, any one of the holders will be able to make or change the nomination even subsequently.] • 'Either or Survivor' Folios / Accounts - any one of the holder can sign • 'Jointly' Folios / Accounts - both holders ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of securities" dated May 18, 2022 and AMFI Circular Ref. No. 135/BP/110/2023-24 titled, 'AMFI Best Practices Guidelines: Updated Guidelines on Transmission of Units' dated January 31, 2024. ^4 As already provided in IMD Circular Ref. No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/29 titled, "Nomination for Mutual Fund Unit Holders -exemption for jointly held folios" dated April 30, 2024 and MIRSD Circular Ref. No. SEBI/HO/MIRSD/POD-1/P/CIR/2024/81 titled, "(a) Ease of Doing Investments- Non-submission of 'Choice of Nomination', (b) Only 3 fields to be provided mandatorily for updating Nomination Details" dated June 10, 2024. ^5As already provided in the Master Circular for Depositories Ref. No. SEBI/HO/MRD/MRD-PoD-2/P/CIR/2023/166 dated October 06, 2023. ^6 Ibid 2 ^7 This serves to aid contact-ability and identification of the nominee/s upon death of the investor and is not to be construed as requiring KYC of the nominees. ^8 The Hon'ble Supreme Court has held in AIR 1950 Supreme Court, 265, that there must be physical contact between the person who is to sign and the signature can be by means of a mark. This mark can be placed by the person in any manner. It could be the to....