If you have a demat account or investment in mutual funds, then one important task should be completed before September 2026. The Securities and Exchange Board of India (SEBI) has made several important changes in the rules related to nomination, which will come into effect from September 1, 2026. These changes are aimed at simplifying the transfer of investments after the death of investors and reducing the number of unclaimed financial assets. The new rules will make the investment process more simple and digital-friendly.
According to the new rules of SEBI, after September 1, 2026, it will be mandatory for any investor who opens a new single-holder demat account or mutual fund folio to provide nominee information. If an investor does not want to add a nominee, he will have to formally opt out of the nomination by filling the prescribed declaration form. However, nomination for joint accounts and folios will still remain optional.
Will be able to add up to three nominees in one account
Investors will now be able to add a maximum of three nominees in a demat account or mutual fund folio. If there is more than one nominee, after the death of the investor they can continue investing jointly or open separate accounts according to their shares. SEBI has made both online and offline options available to ease the nomination process. Digital Signature Certificate (DSC), Aadhaar based e-sign, other valid electronic signatures and OTP based two-factor authentication (2FA) can be used for online nomination. However, for offline nomination only a normal signature will be sufficient. No witness will be required, but in case of thumb impression, two witnesses will be necessary.
Information required in nomination form will be less
Under the new rules, the only mandatory information will be the name of the nominee, relationship with the investor and date of birth of the minor nominee. Information like mobile number, email ID, KYC details and stake percentage will be optional. If share percentage is not specified, the investment will be divided equally among all the nominees.
There will be no restriction on changing the nominee
SEBI has clarified that investors will have the right to add, change or remove the nominee at any time as per their need. Every time there is a change in nomination, the concerned institutions will have to issue a receipt. Investors who have not made nomination or have chosen the opt-out option, will be informed about the benefits of nomination through SMS and email twice a year. Apart from this, reminder pop-ups will be shown during login also.
Why is nomination important?
Nomination simplifies the process of passing on investments to the investor’s family or legal heirs after his death. If nomination is not made, the family may have to go through a lengthy legal and documentary process. SEBI believes that the new rules will help protect investors and their families from future problems. Besides, this step will also prove important in reducing long term unclaimed investments.
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