How to add or change nominee in your Mutual Fund: Here's step-by-step guide

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New Delhi: Mutual fund facilities have been available for a long time and the Indian mutual fund industry has been promoting investor nominations for mutual fund holdings for many years. This month, the Securities & Exchange Board of India (SEBI), which oversees the capital markets, made it mandatory for investors in mutual funds to either nominate someone or choose not to do so.

For new folios, the regulation became effective on October 1, 2022. Let's take a look at how you can nominate someone for your MF investment. After the unfortunate death of an investor, the nomination feature enables the person or people selected to receive the benefits of investments. ()

A column for nominating candidates has always been present on application forms. Intelligent and cautious investors have been designating their loved ones to ensure a smooth transfer of assets after their passing. They are prudent in Mutual funds also for doing the same. For folios of single names, the nomination is a must. ()

However, SEBI has mandated that all current folios, including those that are jointly held, either select someone or choose not to nominate anyone. Existing folio investors will have their investments frozen and be unable to conduct transactions in them if they violate this rule. The deadline to nominate a nominee is March 31, 2023.

New portfolios can be produced, only once you register your nomination or expressly choose not to.

How to add a nominee:

Accounts formed on paper, also known as accounts holding the wet signature of an investor, are thought to be in compliance with the rules if the investor officially signed the application form and specifically designated a nominee or opted out.

If they haven't already, they can still do so by following these steps

- Fill out the nomination form.

- Sign on the form.

- Deliver it to the mutual fund firm or the registrar and transfer agency (RTA).

If you have an online investment account, verify your mutual fund statement. Check to see whether there is a nomination for your folios. The further process can be done by two-factor authentication.