Why nomination is important for investments Nomination ensures that investments are remitted nominated without much trouble. It is important to file a nomination while making an investment, especially if it is in the same name. It becomes very cumbersome for the legal heirs to access these Investment Otherwise.

Form

Nomination can be indicated at the time of investment. Alternatively, the investor can later fill and submit the nomination form. Most investments allow multiple nominations, in which the investor can specify a percentage of the investment for each nominee.

Enrollment

Only individual investors can nominate for their investments. Karta or Power of Attorney holder of HUF cannot nominate. One person—family member, relative, friend—can be appointed as a nominee. In case of insurance policies, if the nominee is not a relative, the policyholder has to prove the insurable interest of the nominee.

Minor as Nominee

A minor can be nominated after providing his/her date of birth and his/her name and address legal guardian,

change nominee

Investors are required to periodically review their nominations and register changes in nominations through:

• A letter of indemnity backed by a guarantee of an independent surety.
• Affidavit made on stamp paper
• no objection certificate from all legal heirs

things to note

• SEBI has made it mandatory for mutual fund unit holders to either register nomination or opt out of nomination with effect from August 1, 2022.
• If the investment is disputed by legal heirs, the nominee places the proceeds of the investment in the trust, pending a final decision by the courts.
• NRIs can be made nominees under Exchange Control Rules.

Content on this page is courtesy of Center for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta,