SEBI Extends MF Nomination Filing Deadline to June 30, 2024 from December 31, 2023

Erstwhile, the Securities Exchange Board of India (SEBI) in a circular dated June 15, 2022, SEBI made the nomination mandatory for the existing mutual fund folios, including the jointly held ones by August 1, 2022.

Given that, SEBI mandated mutual fund investors to submit nomination data or a declaration to opt out of nomination by March 31, 2023. Later, this deadline was extended to September 30, 2023. And mutual fund investors with existing mutual fund folios, including jointly owned ones, had to name a beneficiary or opt out until September 30, failing which their folios will be frozen and they will be unable to redeem their investments.

However, few months back in a circular dated September 27, 2023, SEBI announced that, it has pushed the deadline from September 30 to December 31, 2023 so that MF holders could complete the nomination process.

Now as per the recent circular dated December 27, 2023 the market regulator SEBI has once again provided an extension of timelines for providing ‘choice of nomination’ in eligible demat accounts and mutual fund folios.

The market regulator stated, “Based on representations received from the market participants, for ease of compliance and investor convenience, it has been decided to extend the last date for submission of ‘choice of nomination’ for demat accounts and mutual fund folios to June 30, 2024.”  

In simple words, SEBI has further extended the deadline for adding a nominee or submitting a no-nomination form for your mutual fund investments from December 31, 2023 to June 30, 2024.

In a notification, SEBI said investors must either choose a nominee/s or explicitly opt out of nomination by submitting a declaration before the set deadline. Mutual fund investors, who already have submitted their nomination details, do not need to resubmit their nomination details.

On the other hand, since the deadline for linking PAN with Aadhaar was June 30, 2023, now investors whose PAN and Aadhaar are not linked will be unable to use their PAN as it has become inactive. However, if you pay a specific amount of penalty fee, you can still re-activate your PAN.

The Income Tax department states that a PAN can become operative again in 30 days following disclosure of Aadhaar is submitted to the relevant authority and a penalty fee of Rs 1,000 is paid.

What is Nomination and Why is it Important?

A nomination is a legal document that specifies who will inherit your investments in case of your death. It ensures that your assets are passed on to your desired beneficiaries smoothly and without any legal hassles.

Having a nomination is crucial for several reasons:

• Prevents legal disputes: Without a nomination, your assets may become part of an intestate succession, leading to legal disputes among your heirs.

• Faster and smoother transfer: With a nomination, your assets can be transferred to your beneficiary quickly and easily, avoiding delays and bureaucratic hurdles.

• Peace of mind: Knowing that your loved ones are financially secure in case of your unfortunate demise provides peace of mind.

What's New with the Extended Deadline?

Previously, the deadline for filing nominations was December 31, 2023. However, SEBI received representations from market participants highlighting the need for more time for investors to comply with the requirement. Considering this, the regulator has extended the deadline by six months, giving investors ample time to file their nominations.

To know more about the ‘How to add nominee in mutual funds online’ you may read our article… Don't Miss the Deadline: Update Your Mutual Fund Nominees Soon