SEBI's New Nomination Rules 2025: Must-Know Changes for Demat & Mutual Fund Investors

🏦 Introduction: Why This Update Matters

In 2025, the Securities and Exchange Board of India (SEBI) introduced crucial updates to the nomination process for Demat accounts and Mutual Funds. The changes aim to:

• Streamline asset transfer to loved ones,
• Provide flexibility in choosing nominees,
• Minimize unclaimed assets.

These reforms mark a significant step in investor protection and estate planning.

🔍 What Are the Key Changes?

1. Mandatory Nomination or Formal Opt-Out

• Single account holders must now either nominate or explicitly opt out—nomination isn’t optional anymore investor.sebi.gov.in+7sbnri.com+7hdfcbank.com+7investor.sebi.gov.in+3ksandk.com+3basunivesh.com+3.
• Joint holders may choose to nominate.

2. Increased Nominee Limit

• You can now nominate up to 10 individuals per Demat or Mutual Fund folio,
  up from the earlier limit of 3 hdfcbank.com+1sbnri.com+1stocko.in+3basunivesh.com+3hdfcbank.com+3stocko.in.

3. Detailed Nominee Information Required

Each nominee must provide:

• Full name, DOB (if minor),
• Relationship,
• Share percentage,
• Address, email, mobile,
• Identity proof (PAN/Aadhaar/passport) ksandk.com+8basunivesh.com+8sbnri.com+8sbnri.com+1investor.sebi.gov.in+1.

4. New Nomination Form & Effective Timelines

• New forms effective June 1, 2025 (MF & Demat),
• From September 1, 2025, increase in nominee limit becomes active hdfcbank.com+5basunivesh.com+5economictimes.indiatimes.com+5ksandk.com+1paytm.com+1.

5. Nominee’s Role During Incapacity

• A nominee (if a major) can operate the account on behalf of the investor in case of physical or mental incapacitation economictimes.indiatimes.com+8stocko.in+8basunivesh.com+8.

6. Simplified Transmission of Assets

• Post-death, nominees need only a death certificate and KYC—no more affidavits or indemnity bonds sbnri.com+1ksandk.com+1.

🗓 Timeline at a Glance

✅ What Investors Should Do

1. Update or Fill Nomination
   • Use the new format from June 1 onwards,
   • Add up to 10 nominees from September 1.
2. Ensure Accuracy
   • Double-check all nominee details—missing info causes rejection (marked as NIGO).
3. Choose Wisely in Incapacity Mandate
   • Authorize a nominee to operate your account if unwell.
4. Formal Opt-Out
   • You may opt out only via a clearly filled declaration.
5. Review Regularly
   • Update with life changes such as marriage, divorce, or death of nominee.

🤝 Benefits for Investors and Families

• Faster asset transfer: less paperwork, quicker settlement.
• Greater flexibility: more nominees with defined shares reduces disputes.
• Peace of mind: your future finances are carefully channelled.
• Better estate planning: clear nominee roles complement legal wills.

📋 Real-Life Scenario

Example:

Mrs. Sharma nominates her husband and two children in July 2025 via the updated form and specifies shares. If she becomes critically ill in August, her husband (as a nominee) can manage her Demat account seamlessly—no need for court or third-party involvement.

🔚 Conclusion: Act Today!

These SEBI changes mark a forward leap in investor protection. If you hold any Demat or Mutual Fund investments:

• Review and update your nominations before June 1, 2025,
• Prepare for adding up to 10 nominees by September 1, 2025,
• And ensure your loved ones are secure.

Taking these steps now could save your family months of stress later.