Differences

This shows you the differences between two versions of the page.

@@ Line 1: / Line 1: @@
+{{htmlmetatags>metatag-description=(SEBI now caps demat and mutual fund nominees at 3, not 10, from 1 September 2026. What changed, the new opt-out rule, and what existing investors should check.)&metatag-keywords=(SEBI nomination 2026, 3 nominees demat, mutual fund nominee limit, SEBI circular May 2026, demat opt-out nomination)&metatag-robots=(index,follow)&metatag-og:title=(SEBI Cuts Demat and Mutual Fund Nominees From 10 to 3)&metatag-og:description=(SEBI now caps demat and mutual fund nominees at 3, not 10, from 1 September 2026. What changed, the new opt-out rule, and what existing investors should check.)&metatag-og:type=(article)}}
+====== SEBI Cuts Demat and MF Nominees From 10 to 3 ======
+{{ :social:auto:sebi-nomination-3-nominees-2026-supersedes-10.png?direct&1200 |SEBI Cuts Demat and MF Nominees From 10 to 3 - RTI Wiki}}
+//Last reviewed: 3 September 2026.//
+<WRAP center round info 95%>
+**Quick reply:** You can now name a maximum of **3 nominees** on a demat account or a mutual fund folio, not 10. The limit is in a SEBI circular dated **May 29, 2026** that came into effect on **1 September 2026**. Any page, video or app screen still saying 10 describes a rule that no longer applies.
+</WRAP>
+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from 10 to 3 on 1 September 2026, so a large amount of published advice, including older material on this site, is now out of date.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.
+<WRAP info>
+**The direct answer.** Paragraph 5.1 of SEBI circular SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2026/12676 dated May 29, 2026 says investors can provide **up to 3 nominees**. Paragraph 13 brings the circular into effect from **September 01, 2026**. Paragraph 15 supersedes all earlier SEBI circulars on nomination for demat accounts and mutual fund folios, effective from the date of the circular. Paragraph 11 applies the clauses mutatis-mutandis to existing accounts and folios too.
+</WRAP>
+===== What changed, side by side =====
+^ Point ^ Position before this circular ^ Position from 1 September 2026 ^
+| Maximum nominees | Up to **10** under the January 10, 2025 circular, a figure still repeated everywhere online | Up to **3**. Paragraph 5.1 |
+| New **single** account or folio | Set by the January 10, 2025 circular, now superseded; the new circular does not restate it | Nomination is **mandatory**, unless an opt-out declaration form in the Annexure-B format is submitted. Paragraph 4.1 |
+| **Jointly held** account or folio | Set by the superseded circulars, not restated here | Nomination is **optional**, and consent of **all** joint holders is needed to give or change a nominee, whatever the mode of operation. Paragraphs 4.2 and 4.3 |
+| Witness on an offline form | Set by the superseded circulars, not restated here | Wet signature, and a **witness signature is not required**. A **thumb impression** instead needs **two witnesses** whose name and address are in the form. Paragraph 6.2 |
+| Opting out | Set by the superseded circulars, not restated here | Opt out by the Annexure-B form, or online by choosing opt-out after agreeing to a displayed declaration message. Paragraph 8 |
+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 [[https://righttoinformation.wiki/udgam-unclaimed-deposits-search-2026|the UDGAM unclaimed deposits search]].
+===== The new rules, clause by clause =====
+**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**.
+===== Who is affected, and from when =====
+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.
+===== The one question this circular does not answer =====
+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.
+  - **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.
+  - **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.
+  - **Save a dated PDF or screenshot** of your current nominee details before you change anything.
+  - **If the answers conflict, go to the regulator.** SEBI is a public authority under the [[https://righttoinformation.wiki/act|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 [[https://righttoinformation.wiki/how-to-file-rti-india|how to file an RTI in India]], draft it with the [[https://righttoinformation.wiki/tools/ai-rti-draft-app.html|AI RTI Drafter]] and track the deadline with the [[https://righttoinformation.wiki/tools/timeline-calculator-app.html|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.
+===== Step by step: check and fix your nomination =====
+  - **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.
+  - **Count the nominees.** If it is more than three, send the written query above and file the reply.
+  - **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.
+  - **Decide the shares deliberately.** Leave the percentage blank and the holding splits equally, with the odd lot going to the first nominee named.
+  - **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.
+  - **Collect the acknowledgement and store it** where your family can find it.
+===== What your DP or RTA must now do for you =====
+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.
+===== Common mistakes =====
+  * **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.
+<WRAP center round box>
+**An illustrative situation (not a named person).** A retired investor holds one single demat account and two mutual fund folios. Under the January 2025 rule she recorded six nominees across her children and grandchildren, and left the percentage share blank. In September 2026 she reads that the limit is three and assumes her nomination has been wiped. It has not necessarily been wiped, and the circular does not say what happens to her six. So she does not guess. She writes to her DP and both RTAs asking how many nominees are on record today and how a pre-existing list of six is treated, saves the replies, and takes dated PDFs. If any entity changes the list, paragraph 9.3 entitles her to an acknowledgement.
+</WRAP>
+===== Frequently asked questions =====
+==== How many nominees can I have in a demat account now? ====
+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.
+==== I already have more than 3 nominees. Do I have to remove some? ====
+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.
+==== Is nomination compulsory for a new account? ====
+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.
+==== Can one joint holder change the nominee alone? ====
+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.
+==== Do I need a witness to sign my nomination form? ====
+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.
+==== What if I do not fill in the percentage share for each nominee? ====
+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.
+==== What details are compulsory 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.
+==== Why do I keep getting nomination reminder messages? ====
+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.
+===== How to add or update nominees online =====
+The exact screens differ between depositories and fund houses, but the steps are broadly the same. You always file the nomination yourself.
+  - Log in to your depository participant, broker, or the registrar and transfer agent portal such as CAMS or KFin, or use the NSDL or CDSL investor facility for your demat account.
+  - Open the nomination or beneficiary section for the specific demat account or mutual fund folio.
+  - Enter each nominee with name, relationship, and the identity details the platform asks for. You may add up to 10 nominees.
+  - Set the percentage share for each nominee so that the shares add up to 100 percent. If you leave shares blank, the assets are divided equally.
+  - If you do not wish to nominate anyone, choose the opt-out declaration instead. Sole holders must pick one of the two.
+  - Authenticate the request, usually through an OTP or e-sign, and save the acknowledgement for your records.
+^ Situation ^ Demat account ^ Mutual fund folio ^
+^ Where you file | Depository participant or broker, with NSDL or CDSL | Registrar and transfer agent such as CAMS or KFin, or the AMC |
+^ Maximum nominees | Up to 10 under the 2025 circular | 3 from 1 September 2026 |
+^ Sole holder duty | Nominate or formally opt out | Nominate or formally opt out |
+^ Death of one joint holder | Assets pass to surviving joint holders, not the nominee | Assets pass to surviving joint holders, not the nominee |
+^ When nominees step in | Only after all holders have died | Only after all holders have died |
+^ Who can nominate | The investor only, never a power of attorney holder | The investor only, never a power of attorney holder |
+===== Nominee is not the owner =====
+A common and costly misunderstanding is that the nominee becomes the owner of the shares or units. They do not. A nominee is a trustee who receives the assets so that they can be passed to the rightful legal heirs under the applicable succession law or a valid will.
+The Supreme Court settled this for company shares and securities in **Shakti Yezdani v. Jayanand Jayant Salgaonkar (2023 INSC 1076)**. The Court held that nomination under the Companies Act does not create a third mode of succession and does not give the nominee absolute ownership. Vesting in the nominee means holding, not owning. So even after assets are transmitted to a nominee, the heirs can claim their rightful share. Keeping a clear, up-to-date will alongside your nominations avoids family disputes later.
+===== What families must do on death (transmission) =====
+When the account holder dies and there is no surviving joint holder, the nominees ask for the assets to be transmitted to them. The process is document-driven and broadly similar across providers.
+  - Identify whether the holding is a demat account or a mutual fund folio, and who the registered nominees are.
+  - Submit a transmission request form to the depository participant for demat holdings, or to the registrar and transfer agent or the AMC for mutual fund units.
+  - Attach the death certificate, the nominee KYC documents, and any other proof the provider asks for, such as identity and bank details.
+  - Track the request and respond to any deficiency notice promptly, since missing documents are the usual cause of delay.
+If a genuine transmission request is stuck, escalate through the provider grievance route and then to SEBI SCORES. Our guide on a [[https://righttoinformation.wiki/practical-guides/mutual-fund-redemption-nominee-claim-stuck-amc-rta-sebi-scores|mutual fund nominee claim stuck]] walks through that escalation, and the [[https://righttoinformation.wiki/practical-guides/demat-shares-missing-wrongly-pledged-cdsl-nsdl-sebi-complaint|demat shares missing complaint]] guide covers depository disputes.
+<WRAP center round box 80%>
+**Illustrative example.** Kashvi Pathak holds a demat account and one mutual fund folio as a sole holder. She names four nominees: her spouse 40 percent, two children 25 percent each, and her mother 10 percent. Years later she dies without a surviving joint holder. The four nominees file transmission requests with her depository participant and the registrar, attach the death certificate and their KYC, and receive the assets in those proportions. Because a nominee only holds in trust, the family still settles final ownership in line with her will. This is a hypothetical example for illustration only.
+</WRAP>
+===== Sources =====
+  * [[https://www.sebi.gov.in/sebi_data/attachdocs/jun-2026/1780397706130.pdf|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.
+===== Related on RTI Wiki =====
+  * [[https://righttoinformation.wiki/udgam-unclaimed-deposits-search-2026|UDGAM unclaimed deposits search]]
+  * [[https://righttoinformation.wiki/how-to-file-rti-india|How to file an RTI in India]]
+  * [[https://righttoinformation.wiki/act|The Right to Information Act, 2005]]
+  * [[https://righttoinformation.wiki/tools/ai-rti-draft-app.html|AI RTI Drafter]]
+  * [[https://righttoinformation.wiki/tools/timeline-calculator-app.html|Timeline Tracker]]
+  * [[https://righttoinformation.wiki/book|The RTI Playbook]]
+{{tag>sebi nomination demat mutual funds investor rights 2026 rti}}
+  * [[:add-change-nominee-demat-mutual-fund-india|add or change a nominee on your demat account and mutual fund folio]]