Mutual fund nomination deadline to end on Mar 31

Existing mutual fund investors have time till March 31 to nominate a beneficiary or opt out of it by submitting a declaration form, failing which their folios will be frozen, and they will not be able to redeem investment. The Securities and Exchange Board of India (Sebi), in its circular on June 15, 2022, made it mandatory for mutual fund subscribers to submit the nomination details or declaration to opt out of the nomination on or after August 1, 2022. Later, the deadline was extended to October 1, 2022. The deadline for all the existing mutual fund folios, including jointly-held ones, was set as March 31, 2023, failing which the folios will be frozen for debits. Explaining the rationale behind the Sebi’s move, Anand Rathi Wealth Ltd COO Niranjan Babu Ramayanam said that many investment accounts in the past have been opened without nominating anyone to whom the assets should be transmitted in case something happens to the account holders. This means that the rightful heirs had difficulty in getting the assets transmitted to them due to the hassles of different kinds of documentation requirements. ”Many rightful heirs don’t even know about such investments, which are supposed to be claimed by them. Huge investments are lying unclaimed in the investment accounts where the holders are deceased and none of their heirs has claimed for the same. This may lead to miscreants creating fake documents and withdrawing investments that have been lying unattended for a very long time,” he added. Under the new framework, asset management companies (AMCs) will have to provide an option to the unit holders to submit either the nomination form or the declaration form for opting out of the nomination in physical or online as per the choice of the unit holders. In the case of a physical option, the forms will carry the wet signature of all the unit holders and in the case of the online option, the forms will be using an e-sign facility instead of the wet signature of all th