SEBI News Update: Even though SEBI has withdrawn the decision to freeze demat mutual fund accounts for not declaring a nominee, experts are calling it necessary in the interest of investors.
Stock market regulator SEBI has abolished its old order of freezing the account for not giving the name of the nominee in the demat account and mutual fund account. Due to this new decision of SEBI, those demat account holders or mutual fund account holders who have not chosen the option of Choice of Nomination need not worry. Earlier, SEBI had given time till 30 June 2024 to all demat – mutual fund account holders to choose this option of giving the name of the nominee. If this was not done, there was a provision to freeze the account, after which the account holders would not be able to do any transaction.
After the demand for simplifying the compliance rules from the stock market stakeholders and participants, SEBI decided that the demat account or mutual fund folio account of existing investors or unit holders who have not opted for the nomination option will not be frozen. SEBI has issued a circular on June 10, 2024 regarding this.
Also Read: Demat Accounts, Mutual Funds Won’t Freeze for Lack of Nomination
SEBI had stopped the payment due to non-submission of nomination choice by listed companies or RTAs. Payment will be made to the investors. However, SEBI has made it clear that new demat account holders or mutual fund account holders will have to fill the option of choosing the nomination option or not naming the nominee.
SEBI has asked the Depository Participants, AMCs, RTAs to update the information about choosing the nomination option to the demat account or mutual fund account holders every fortnight through email and SMS. A pop-up will be provided to encourage the existing investor to name the nominee, so that this pop-up message will start appearing on logging into the demat account or mutual fund account on 1 October 2024.
Financial expert Ashwani Rana said, this is a big relief from SEBI. Earlier SEBI had said that the accounts of demat account holders and mutual fund customers who do not give the name of the nominee will be frozen and no transaction will be done in it. But SEBI has issued an order and made it clear that the accounts of those who do not give the name of the nominee till June 30 will not be frozen and customers will be able to do transactions as before. Ashwani Rana said that even though SEBI has given relief, every customer must give the name of the nominee in the demat account or mutual account so that in case of death of the account holder, shares or mutual fund units can be easily transferred to the nominee. If this is not done, the nominee may have to face huge problems.
