The regulator has reduced the mandatory information required for nomination to only the nominee’s name and relationship with the investor
Capital markets regulator, Securities and Exchange Board of India, has eased nomination norms for demat accounts and mutual fund folios, simplifying the process for investors while making nomination the default option for all new single-holder accounts opened from September 1, 2026.In a circular issued on Friday, the regulator said investors opening single-holder demat accounts or mutual fund folios will have to mandatorily provide nomination details unless they specifically choose to opt out through a declaration form. Joint accounts, however, will continue to have optional nomination facilities.The move comes after the regulator received representations from market participants citing operational challenges in implementing earlier nomination rules issued in January 2025.Revised frameworkUnder the revised framework, investors can nominate up to three individuals. In cases involving multiple nominees, the holdings can either continue in the same account after the investor’s demise or be split into separate accounts or folios based on respective entitlements.SEBI has also relaxed procedural requirements for physical nominations. Witness signatures will no longer be required if the investor signs the nomination form with a regular signature. Witnesses will be mandatory only in cases where the investor uses a thumb impression.The regulator has allowed both online and offline modes for nominations. Online nominations can be authenticated using digital signatures, Aadhaar-based e-sign, other legally recognised e-sign facilities, or two-factor authentication involving a one-time password sent to the investor’s registered mobile number and email address.The regulator has reduced the mandatory information required for nomination to only the nominee’s name and relationship with the investor. Details such as mobile number, email address, share allocation among nominees and identity documents have been made optional.Where investors do not specify percentage allocations among nominees, the holdings will be divided equally, with any residual odd lot transferred to the first nominee listed in the form.To encourage wider adoption of nominations, depository participants and mutual fund registrars will have to send bi-annual reminders through email and SMS to investors who have not registered nominees. Online platforms will also be required to display pop-up messages highlighting the benefits of nomination during the investor’s first login of the day.SEBI said the revised rules aim to improve investor onboarding, simplify succession processes and reduce the build-up of unclaimed financial assets in the securities market.The circular will come into effect from September 1, 2026, and will apply to both new and existing accounts and folios.Published on May 29, 2026
