Your mutual fund (MF) accounts may be frozen if you do not submit your MF nominations by March 31, 2023. Regulatory guidelines require investors to mention nominee for their fund folios or else inform the fund house that they wish to opt out of nominations by fiscal year-end.
Here’s everything investors need to know about the mutual fund nomination process, the benefits and repercussions of not filing nominations in four quick FAQs.
What exactly is a mutual fund nomination?
Nomination is a process of appointing a person to take care of your assets in the event of death. It is mandatory for new folios/accounts opened by investors to make a nomination. In case an investor does not wish to nominate, they can opt out of the process while filling up the form.
What are the benefits of registering a nomination?
When a nomination is registered , it helps facilitate easy transfer of funds to the nominee in the event of demise of an investor. In the absence of a nominee, the heirs/claimants will need to produce a host of documents like a will, legal heir certificate , NOCs from other legal heirs, etc., to get their units transferred in his or her name.
What will happen if you miss filing nomination by March 31 deadline?
If you do not make a nomination in your existing folio, the folio will be frozen which means that investors will not be able to switch or redeem investments.
How do you make a nomination?
If you have opened an account via offline mode and have not updated the nominee, you can do so by filling up the nomination form, signing it, and then submitting it to the registrar and transfer agent (RTA) or the mutual fund house. If you have opened a mutual fund account online, check your mutual fund statement and see if your folios have a nominee in place.
Existing investors of mutual funds can submit their nomination (or opt out of nomination) via a two-factor authentication login on investing platforms. For an account via offline mode, one will need to fill up the nomination form, sign it, and then submit it to the registrar and transfer agent (RTA) or the mutual fund house.
For investors of mutual funds via the online method, completion of nomination can be done via the websites of the RTA (CAMS and KFintech) which will request for a one-time-password (OTP).
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