Are you a
demat account holder
? Then you must add nominee details by September 30, 2023 to avoid your account being frozen for debits. As per a SEBI circular, it is now mandatory to nominate an individual for your
or explicitly opt out. Existing investors who have previously provided nomination information are exempt from resubmitting. In case you fail to submit the nomination details, or opt out of nominating anyone by September 30, your demat account will be frozen for debits, according to an ET report.
- Nomination in demat accounts is now obligatory.
- Two options: nominate someone or opt out of nomination.
- Existing investors need not resubmit nomination details.
- A two-factor authentication (2FA) process is in place for investors to access online trading platforms of Stock Brokers/Depository Participants and submit or opt out of nominations.
SEBI Circular Update:
- A SEBI circular dated March 27, 2023, announced a change in the effective date for provisions related to freezing of accounts. Instead of March 31, 2023, these provisions will come into force on September 30, 2023.
Nomination Process with NSDL:
- NSDL facilitates online nomination for demat accounts (applicable to residents and individuals with a single demat account).
- Up to three nominees can be added for demat account holders.
How to Add a Nominee with NSDL:
FAQs on Demat Nomination (NSDL):
What is ‘Nomination’? Nomination is a straightforward process where a securities holder specifies who should receive the securities upon their demise. It can be done when the demat account is opened or later.
Can Joint Holders Nominate? Yes, joint holders can nominate. In case of a joint holder’s death, securities go to the surviving holder(s). Only if all joint holders pass away will the securities be transmitted to the nominee (if nominated) or legal heir.
Who Can Be a Nominee? Only individuals can be nominees. Entities like societies, trusts, corporations, partnerships, or Hindu Undivided Families cannot be nominees.
Can There Be More Than One Nominee? Yes, up to three nominations are allowed for one demat account. If two or three nominees are specified, the proportion (%) in which securities should be transmitted upon the account holder’s death must be mentioned.
How to Appoint a Nominee? Nominee information can be provided during account opening. If not done initially, a Nomination form must be filled and submitted to the DP (Depository Participant).
Can the Nominee Be Changed? Yes, account holders can change the nominee by filling a new Nomination form and submitting it to the DP.