SEBI Cuts Demat and MF Nominees From 10 to 3

Last reviewed: 3 September 2026.

The nominee limit on demat accounts and mutual fund folios came down from 10 to 3 on 1 September 2026, so a large amount of published advice, including older material on this site, is now out of date. SEBI made the change in a circular dated May 29, 2026, which also sets the default rules for single accounts, joint accounts and opting out.

A word about that middle column, because honesty matters more than a tidy table. This page states the earlier position only where the new circular records it. It tells us the January 10, 2025 circular was titled “Revise and Revamp Nomination Facilities in the Indian Securities Market”, applied to demat accounts and mutual fund folios from March 01, 2025, and aimed at preventing the generation of unclaimed assets. It does not reprint the old clause-by-clause detail, so neither does this page.

Paragraph 2 gives the reason for the rewrite in one line: SEBI received representations from stakeholders raising operational challenges in implementing the January 2025 circular. The original aim has not changed. Assets go unclaimed mostly because nobody in the family knows the account exists, the same problem behind the UDGAM unclaimed deposits search.

Three nominees, and what they can do afterwards. Paragraph 5.1 sets the ceiling at 3. Paragraph 5.2 says that with more than one nominee, on the demise of the investor the nominees may either continue in the same account or folio or open separate accounts or folios for their respective holding. Naming three people does not force a split or a sale.

Single accounts: nominate, or say in writing that you will not. Paragraph 4.1 makes nomination mandatory for all single accounts and folios opened on or after implementation, unless you submit the opt-out declaration form at Annexure-B. You either name someone or you record a deliberate refusal.

Joint accounts: optional, but unanimous. Paragraph 4.2 makes nomination optional for jointly held accounts and folios. Paragraph 4.3 adds the part that trips people up: consent of all joint holders is required to provide or change a nominee, regardless of the mode of operation. An either or survivor account does not let one holder act alone.

How you submit it. Paragraph 6.1 puts the form at Annexure-A and paragraph 6.2 lets you file it online or offline. Online, validation must be by a Digital Signature Certificate, an Aadhaar-based e-sign or another e-sign recognised under the Information Technology Act, 2000, or 2FA where one factor is an OTP to the registered mobile number and email. Offline, the form carries a wet signature and no witness. Only a thumb impression needs two witnesses, whose name and address go in the form.

What is compulsory. Paragraph 7a makes only the nominee name and the nature of the relationship mandatory, plus the date of birth if the nominee is a minor. Paragraph 7b makes the mobile number, email, percentage share, KYC identifier and guardian details optional. Leaving the share blank has a defined result: the assets are apportioned equally, and any odd lot after the division goes to the first nominee named. Read that twice before you fix the order of the names.

Change it as often as you like. Paragraph 9.1 says investors can provide, change or cancel a nomination any number of times.

Open a single account or folio on or after implementation and paragraph 4.1 puts you in the nominate-or-opt-out lane from day one. If you already hold a demat account or folio, paragraph 11 says the foregoing clauses shall be applicable mutatis-mutandis for existing accounts and folios also.

If you are working from older guidance, check whether the instrument still stands. Paragraph 15 supersedes the earlier SEBI circulars on nomination for demat accounts and mutual fund folios, and the listed ones include HO/42/36/12(4)2025-OIAE-IAD3 dated December 11, 2025, SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2025/110 dated July 30, 2025, SEBI/HO/OIAE/OIAE_IAD-3/P/ON/2025/0027 dated February 28, 2025, and SEBI/HO/OIAE/OIAE_IAD-3/P/ON/2025 dated January 10, 2025.

Two dates sit in this circular and they differ. Paragraph 13 makes the circular effective from September 01, 2026. Paragraph 15 makes the supersession effective from the date of the circular, May 29, 2026. Quote whichever one your question turns on.

Under the January 2025 framework some investors registered more than three nominees. The new circular caps the number at 3 and says at paragraph 11 that its clauses apply mutatis-mutandis to existing accounts and folios. What it never says is what happens to a nomination that already names four, six or ten people. It does not say those investors must cut the list to three. It does not say they are protected as they stand. The text simply does not address it.

So this page will not pretend to know. Anyone telling you confidently that your extra nominees have been deleted automatically, or that they are safe forever, is filling a gap with a guess. Get the position in writing instead.

1. Ask your Depository Participant or mutual fund RTA in writing, by email to their official service address: how many nominees are recorded on my account or folio today, and how do you treat a nomination naming more than three nominees after the September 01, 2026 circular.
2. Keep the acknowledgement. Paragraph 9.3 requires one for every nomination and every subsequent change, so you have a record of what changed and when.
3. Save a dated PDF or screenshot of your current nominee details before you change anything.
4. If the answers conflict, go to the regulator. SEBI is a public authority under the Right to Information Act, 2005, so you can file an RTI application asking for copies of any instructions or clarifications issued on the treatment of pre-existing nominations exceeding three nominees. That asks for records, not opinions. New to it? Start with how to file an RTI in India, draft it with the AI RTI Drafter and track the deadline with the Timeline Tracker.

Note the boundary. Most DPs and RTAs are private companies, not public authorities, so the reliable RTI route is to SEBI. With them, your levers are the written query and the paragraph 9.3 acknowledgement.

1. Read what is actually recorded. Open your depository or broker portal and your mutual fund or RTA portal separately. A demat account and a folio are different records, and one does not update the other.
2. Count the nominees. If it is more than three, send the written query above and file the reply.
3. Check the relationship field and any minor nominee. Paragraph 7a makes the relationship mandatory, and the date of birth mandatory where the nominee is a minor.
4. Decide the shares deliberately. Leave the percentage blank and the holding splits equally, with the odd lot going to the first nominee named.
5. On a joint account, get every holder to sign, and if you truly want no nominee, opt out through the Annexure-B form or the online declaration rather than leaving the field empty.
6. Collect the acknowledgement and store it where your family can find it.

Three obligations run in your favour, and they are worth quoting when a service desk resists.

An acknowledgement, every time. Paragraph 9.3 requires one for every nomination and every subsequent change. It is not a courtesy you have to negotiate for.

Your choice on the statement. Paragraph 10.1 says the periodic statement of account or holding statement shall print either the nominee name or names or a simple Yes or No showing whether nomination has been made, as per the investor's choice. If you would rather your nominee names did not travel by email or post, ask for the Yes or No form.

Nudges only if you have not nominated. Paragraph 10.2 requires DPs and mutual fund RTAs to send bi-annual email and SMS reminders to accounts without nomination, including opt-outs, and to show a pop-up on the benefits of nomination on the first log-in of the day. These must not go to investors who have already nominated, so if yours keep coming, that points to a defect in their record of your account.

• Repeating the number 10. Correct under the old circular, wrong now. Check the date on anything quoting a nominee limit.
• Assuming your demat nomination covers your mutual funds. Separate records, different entities. Check both.
• Leaving the percentage share blank by accident. Equal division plus the odd lot to the first named nominee is the default, so the order of names starts to matter.
• Thinking one joint holder can act alone. Paragraph 4.3 needs consent of all joint holders.
• Chasing a witness you do not need. A wet signature needs none. Two witnesses are only for a thumb impression.
• Confusing a nominee with an heir. A nomination tells the intermediary who may receive or continue the holding. It is not a will, and this circular does not touch succession law.

Up to three. Paragraph 5.1 of the May 29, 2026 circular says investors can provide up to 3 nominees, and the same limit applies to mutual fund folios.

The circular does not say. It caps the number at 3 and says at paragraph 11 that the clauses apply mutatis-mutandis to existing accounts and folios, but it never spells out what happens to a nomination already naming more than three. Ask your DP or RTA in writing and keep the reply. Paragraph 9.3 entitles you to an acknowledgement for any change made.

For a single account or folio opened on or after implementation, yes in effect. Paragraph 4.1 says the investor shall mandatorily provide nomination unless an opt-out declaration form in the Annexure-B format is submitted. Paragraph 4.2 makes it optional for jointly held accounts and folios.

No. Paragraph 4.3 requires consent of all joint holders to provide or change a nominee, regardless of the mode of operation, including either or survivor accounts.

Not for a wet signature. Under paragraph 6.2 a witness signature is not required. A thumb impression instead of a signature must be witnessed by two persons whose name and address are captured in the form.

Paragraph 7b makes the share optional. Where it is not specified, the assets are apportioned equally among the nominees and any odd lot after the division goes to the first nominee named in the form.

Paragraph 7a makes the nominee name and the nature of the relationship mandatory, plus the date of birth if the nominee is a minor. Mobile number, email, percentage share, KYC identifier and guardian details are optional under paragraph 7b.

Paragraph 10.2 requires bi-annual email and SMS nudges and a first log-in pop-up for accounts without nomination, including opt-outs, and says these must not be sent to investors who have already nominated. If you have a valid nomination on record, raise it with your DP or RTA in writing.

• SEBI circular SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2026/12676 dated May 29, 2026 - the operative instrument and the source of every rule on this page.

• UDGAM unclaimed deposits search
• How to file an RTI in India
• The Right to Information Act, 2005
• AI RTI Drafter
• Timeline Tracker
• The RTI Playbook