SEBI Makes Nomination Mandatory for Single Demat and Mutual Fund Accounts from September 1, 2026

The Securities and Exchange Board of India (SEBI) has revised the nomination norms for demat accounts and mutual fund folios. The updated rules will come into effect from September 1, 2026.

The changes aim to simplify the nomination process and improve investor onboarding. The regulator has outlined clear guidelines on eligibility, nominee limits, and account treatment.

When Is Nomination Mandatory or Optional in Demat and Mutual Fund Accounts?

SEBI has made nomination mandatory for all single-holder demat accounts and mutual fund folios. Investors who do not wish to nominate must submit an opt-out form to comply with the requirements.

For jointly held accounts, nomination remains optional under the revised framework. However, all joint holders must provide consent when adding or modifying nominee details.

How Many Nominees Can Investors Add and What Are the Rules?

Investors are allowed to nominate up to 3 individuals for their accounts or folios. In case of multiple nominees, investors can assign a percentage share for each nominee.

If no share percentage is specified, the holdings will be distributed equally among nominees. Any remaining fractional or odd units after division will be transferred to the first nominee listed in the form.

What Details Are Required for SEBI Nomination Forms?

SEBI has specified both mandatory and optional fields for nomination forms to standardise the process. Mandatory details include the nominee’s name, relationship with the investor and date of birth in the case of a minor nominee.

Optional information covers contact details such as mobile number and email address, percentage allocation among nominees, and KYC identifiers or guardian details for minors. These requirements are intended to improve record accuracy and ensure greater consistency in nomination records.

Can Nomination Be Changed and What Happens to Existing Accounts?

Investors can add, modify, or cancel nomination details any number of times. Regulated entities are required to provide acknowledgements for every nomination-related update made by investors.

For accounts without nominees, depository participants and mutual fund registrars will issue bi-annual reminders through SMS and email. Additionally, digital platforms will display pop-up messages highlighting the benefits of nomination.

Read More: SEBI Proposes API-Based STP Framework to Reduce Costs and Latency.

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Conclusion

The SEBI nomination rule changes, effective September 1, 2026, introduce a structured approach to account ownership planning. Mandatory nomination for single accounts is a key shift aimed at reducing operational complexities.

The framework also clarifies processes related to multiple nominees and account transfers. Overall, the revised norms focus on improving transparency and ease of account management for investors.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.