SEBI’s surprise move on mutual fund frozen accounts, nomination details – All you need to know

financialexpress.com:

The Securities and Exchange Board of India (SEBI) has announced a major policy shift aimed at streamlining investment procedures to boost investor convenience.

The capital market regulator has done away with the freezing of demat accounts and folios for existing investors in the absence of nomination details. The move will allow investors continue investment without facing the inconvenience of having their accounts locked due to missing nominee details.

In a circular, SEBI said non-submission of ‘choice of nomination’ shall not result in the freezing of demat accounts as well as MF folios.

The regulator has issued a new circular extending the deadline for existing investors to submit their ‘choice of nomination’ for demat accounts and mutual fund folios till June 30, 2024.

SEBI said it has “extended the last date for submission of ‘choice of nomination’ for demat accounts and mutual fund folios to June 30, 2024 failing which demat accounts/folios shall be frozen for debits.”

Also read: Kotak Mutual Fund launches Kotak Special Opportunities Fund – Should you invest?

This decision will ensure that there is no disruption to investors’ access to their funds and securities.

Based on representations received from the market participants, for ease of compliance and investor convenience, SEBI has also decided that securityholders holding securities in physical form shall be eligible for receipt of any payment including dividend, interest or redemption payment as well as to lodge grievance or avail any service request from the RTA even if ‘choice of nomination’ is not submitted by these securityholders.

It also said that all existing investors/ unitholdersare encouraged, in their own interest, to provide ‘choice of nomination’