Sebi proposes changes to simplify nomination rules

ET BureauLast Updated: Mar 18, 2026, 05:48:00 AM IST

Synopsis

Sebi has proposed simplifying nomination rules for demat accounts and mutual fund folios, making it the default option for new investors. This change aims to ease operational challenges, with investors now needing to explicitly opt out. Mandatory nominee information will be limited to name and relationship, with other details becoming optional.

Mumbai: The Securities and Exchange Board of India (Sebi) on Tuesday proposed changes to simplify nomination rules for demat accounts and mutual fund folios.

The regulator has suggested several modifications to the nomination framework introduced in January 2025 after industry participants flagged operational challenges in implementing certain provisions.

One of the key proposals is to make nomination the default option for investors opening new demat accounts or mutual fund folios. Investors who do not wish to appoint a nominee would have to explicitly opt out and provide consent through a declaration.

The move replaces the earlier requirement of opting out through OTP verification and video-based confirmation, which market participants said was cumbersome.

The regulator has also proposed simplifying the information required for nominees.

Under the proposed framework, only the nominee's name and relationship with the investor would be mandatory.

Other details such as address, mobile number, email and percentage share of the nominee would be optional. If investors do not specify the share of each nominee, the assets would be divided equally among them.

The regulator has also proposed changes to the maximum number of nominees allowed. While the January 2025 circular had increased the limit from three to 10 nominees, Sebi has now proposed restricting it to four, citing operational complexity. Besides, data showed that very few investors appoint more than one or two nominees.

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