NEW DELHI, India — SEBI’s new nomination rules for demat accounts and mutual funds will come into effect from September 1, 2026, bringing a revised framework under which investors can name up to three nominees for a single-holder demat account or mutual fund folio. The changes are aimed at simplifying the transfer of investments after an investor’s death and reducing the accumulation of unclaimed assets.
- Three nominees allowed: Investors can nominate up to three people for a demat account or mutual fund folio.
- New single-holder accounts: From September 1, investors will need to either record a nomination or formally opt out.
- Nomination changes: Investors can modify or cancel their nominations multiple times.
- Joint accounts: Nomination will remain optional, with consent required from all joint holders when a nomination is added or changed.
SEBI new nomination rules from September 1
Under the revised framework, a single-holder demat account or mutual fund folio opened from September 1 cannot simply be left without a recorded nomination decision. Investors will have the choice of appointing nominees or submitting an opt-out declaration.
The framework allows a maximum of three nominees. Investors will also be able to change or cancel their nomination choices any number of times, giving them greater flexibility to update their arrangements when circumstances change.
How will assets be divided among three nominees?
Investors who appoint multiple nominees can specify the percentage share that each nominee should receive. If no percentage allocation is mentioned, the assets will be distributed equally among the nominees.
Where an equal division results in an odd lot that cannot be divided precisely, the remaining portion will go to the first nominee listed.
This allocation mechanism provides a defined framework for cases where investors choose multiple nominees but do not separately mention their respective shares.
Are nominations mandatory for joint demat accounts?
The new requirement does not make nomination compulsory for jointly held demat accounts and mutual fund folios. Investors holding such accounts can continue to keep nomination optional.
However, when a nomination is added or changed in a joint account, all joint holders will have to provide their consent. This requirement applies to both adding a nominee and making subsequent changes to an existing nomination.
How can investors add a nominee online or offline?
SEBI’s revised framework provides both online and offline routes for completing nomination-related requests. Digital requests can be authenticated through a digital signature, Aadhaar-based e-sign or two-factor authentication using OTPs sent to the registered mobile number and email address.
For offline forms, a normal signature will not require a witness. However, investors using a thumb impression will need the form to be witnessed by two people.
Investors who do not want to nominate anyone can instead select the opt-out facility. Depending on the service provider, the declaration can be submitted physically or through an online facility.
How to add a nominee to a demat account
For a demat account, investors can generally access their broker’s website or mobile application and locate the nomination section. The process may involve entering the nominee’s name, relationship and other required details before completing OTP or e-sign verification.
The exact navigation can vary between brokers, so investors should follow the process provided by their respective broker or depository participant. After submitting the request, checking the nomination status can help confirm that the update has been recorded.
How to update mutual fund nomination
Mutual fund investors can generally update nomination details through the concerned asset management company or registrar and transfer agent. Investors may need their folio and PAN details while completing the process.
The exact procedure can depend on the platform or service provider through which the mutual fund investment is held. Investors should therefore verify the available nomination facility and confirmation status after submitting a request.
Why SEBI changed the nomination framework
The revised rules are part of SEBI’s broader effort to make the transmission of investments easier. When an investor dies, the absence of clear nomination arrangements can complicate the process of transferring financial assets.
By allowing multiple nominees and providing a formal opt-out mechanism, the revised framework seeks to make investors’ choices clearer while addressing issues linked to unclaimed investment assets.
SEBI’s Quick Transmission Processing facility
The nomination changes come alongside another measure aimed at making transmission of investments more efficient. In June, SEBI approved a Quick Transmission Processing, or QTP, facility for small claims.
Under the approved facility, the limit is ₹10,000 for physical holdings and ₹30,000 for dematerialised holdings. The measure is part of the regulator’s broader efforts to simplify the process through which investments are transferred after an investor’s death.
What investors should check before September 2026
Investors with single-holder demat accounts and mutual fund folios should check their existing nomination status before the new framework takes effect. Those who wish to nominate beneficiaries can review the details they want to record, while investors who do not want to appoint nominees can use the applicable opt-out mechanism.
Investors with joint accounts should also remember that nomination remains optional, but changes to a nomination will require the consent of all joint holders.
Frequently Asked Questions
How many nominees can be added to a demat account from September 2026?
Under the revised SEBI framework, investors can name up to three nominees for a single-holder demat account.
Can investors change their nominee later?
Yes. Investors can change or cancel their nomination any number of times under the revised rules.
What happens if three nominees are added without specifying percentages?
If the investor does not specify the percentage share for each nominee, the assets will be divided equally. Any odd lot remaining after the division will go to the first nominee listed.
Is nomination compulsory for a joint demat account?
No. Nomination remains optional for jointly held demat accounts and mutual fund folios. However, all joint holders must consent when a nomination is added or changed.
Can nomination be completed online?
Yes. Depending on the facility provided by the broker, depository participant, mutual fund or registrar, investors can complete the process online using methods such as digital signature, Aadhaar-based e-sign or OTP-based two-factor authentication.
Financial disclaimer: This article is intended for informational purposes only and does not constitute investment, financial, legal or tax advice. Investors should verify the applicable nomination procedure with their broker, depository participant, mutual fund or registrar and consult a qualified professional where necessary.
