Mutual Fund (MF) nomination deadline to end soon. Have you added your nominee?

The mutual fund (MF)nomination deadline of 31 March 2023 is just a few days away. Last year, the capital markets regulator Securities and Exchange Board of India (Sebi)released a circular and made it mandatory for all MF investors to either fill in the nominee for their investments or opt out. So, please check your funds for the updation of the nominee as in if you fail to comply with the mandate, your investments will be frozen.

According to Siddharth Maurya, Resource Specialist, Expertise Real-Estate and Fund Management, the mutual fund nomination deadline of March 31, 2023, acts as a helpful reminder for investors to check their holdings and make sure that their hard-earned money is protected in case of unforeseen situations. When this day draws near, it is essential to take action by designating a reliable person or choose not to nominate anyone for each of your mutual fund folios.

“Inaction could lead to frozen accounts, which might interfere with your financial plans,” he added.

Why is it important to add nominees to your folios

Keep in mind that your nominee(s) will serve as your representative and are essential to ensuring that, in the tragic case of your untimely passing, your investments are passed to your loved ones. so it’s important to choose a trustworthy person and make a wise decision. Act immediately to protect your family’s financial future and your own by not waiting until it is too late, noted Siddhartha.

Nomination rule by SEBI

According to SEBI’s circular dated 15 June 2022, all investors would have the option of making a nomination for the mutual fund units held by them or opting out of the nomination facility altogether. If the nomination is not made by 31 March, their investments will get frozen, and no transaction can occur.

Nominees in MF folios can be added both online and offline

The industry offers multiple channels for investors to complete the process. Online is the more efficient route. Anand Dalmia, Co-founder & CBO of Fisdom, a wealth tech platform said MFCentral and RTA websites offer distinct user experiences, each attempting to solve for convenience.

However, there are corner cases that could baffle an online processing system. Most such complications have been observed in the case of jointly-held folios, especially where the contact details have not been furnished or updated for all holders. For such requests that can’t be processed online, the physical submission route is the next best alternative, added Anand.

Disadvantages of offline submission

Undoubtedly, submitting non-financial transactions offline comes with its own set of inconveniences, including cumbersome paperwork and longer processing times. Investors who submit physical forms in the last week before the deadline may also risk missing the cut-off date if an intimation to revise a mismatched signature is not received in time. But then, that’s a risk that can be mitigated by timely action and diligence throughout the process.

Despite these potential challenges, investors should approach this process with a sense of urgency. While it may seem painstaking, the benefits of completing the nomination process far outweigh the efforts required.


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