On 15th June 2022, capital markets regulator SEBI issued a circular to all mutual fund houses. The circular mentioned that fund houses have to ensure the unit holders either:
- Provide nominee(s) details in the specified format, or
- Opt out of nomination through a signed declaration form in the specified format
The unit holders have to fill in the nominee details or opt out of nomination for each of their MF folios by the 31st March 2023 deadline. If any unit holder doesn’t comply with the nomination circular for any folio(s) by 31st March 2023, SEBI has asked the AMCs to freeze their respective folio(s) for debit. In short, it means you will not be able to do transactions like redemption, systematic withdrawal plan (SWP), systematic transfer plan (STP), etc., in the applicable mutual fund folios from 1st April 2023.
It is recommended that you fill in the nominee(s) details rather than opting out of it. Nomination ensures that the nominee(s) can claim the mutual fund units smoothly in the event of the unit holder’s demise.
How to do nomination through MFCentral
MFCentral is an investor services hub conceived by CAMS and KFintech. To update the nomination or opt out for all your folios on the MFCentral website, take the following steps:
- If you don’t have an account, sign up using your PAN and mobile number. If already registered, log in using your PAN and password/OTP
- Click on the “Service Requests” link
- Select the “Update Nominee Details” link
- You will see the list of all your folios with various AMCs and the existing nomination status and nominee details (if any).
- Select the folio for which you want to enter/modify the nominee details or opt out, and click on the “Next” button at the bottom of the screen
- If you want to add/modify the nominee details, select the edit button. Make the changes, select the "Save" option, and click the "Submit" button. Enter the OTP and select "Verify OTP".
- If you don’t wish to nominate, select the “I do not wish to nominate” checkbox and submit. Enter the OTP and select “Verify OTP”.
You can repeat the above process for each folio with every AMC wherever you want to enter/update the nominee(s) details or opt out of the nomination.
How to do nomination through KFintech
You can update the nomination or opt out through the KFintech website by taking the following steps:
- From the “Login” dropdown, select “Retail Investor”
- From the “Investor Statement and Reports” section, select the “Nominee Updation” link
- Enter your PAN card number, “Mode of Holding” as either “Single” or “Joint Holder”, “Select Folio Option” as “All Folios” or “Without Nominee Folios”, select your mobile and email id under the “Email/Mobile” field, and select “Generate OTP”
- Enter the OTP and press the “Validate OTP” button
- You will be shown the list of your MF folios and the existing nominee status.
- Select the individual folio or multiple folios, or all folios for filling in nomination details. Next, select either the “Opt in nomination” or “Opting out of nomination”. It is recommended that you choose “Opt in nomination”
- Enter the details in “Select number of nominees”. You can enter a maximum of 3 nominees
- Enter the nominee(s) details, such as name, percentage allocation, relationship with the nominee, date of birth, address, etc. and press the “Save” button.
- Click on “Generate OTP”
- Enter the OTP and click “Submit”
- You will get a message that your request has been submitted. You will also get an SMS confirmation of the receipt of the updation request
How to do nomination for mutual fund units bought through a demat account
For mutual fund units purchased through a demat account, the nomination for the demat account will be applicable for those units. In case you want to add/modify the nominee or opt out of the nomination, you will have to make those changes at the demat account level.
If you have a demat account with NSDL, you can take the following steps:
- Visit the link:https://eservices.nsdl.com/instademat-kyc-nomination/#/login
- Enter your demat details such as DP ID, Client ID, and PAN Card number
- Select the nominate or opt out option
- E-sign using Aadhaar
- Enter the OTP received on the mobile number registered with UIDAI and complete the transaction
Update the nominee details before 31st March 2023
As per the SEBI circular, make sure you update the nominee details or opt out of nomination before the 31st March 2023 deadline. If you fail to do so, your respective mutual fund folio(s) will be frozen for debits. In such a scenario, you will not be able to redeem units or carry out STP/SWP transactions.
It is recommended that you update the nominee details rather than opt for nomination. The nomination will ensure your mutual fund units are smoothly transferred to your nominee(s) after your demise.
Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached at LinkedIn