SEBI: Procedure for unit holders of Asset Management companies to opt out of nomination

SEBI vide circular no SEBI/HO/IMD/IMD-I DOF1/P/CIR/2022/105 dated 29th June 2022 has clarified that Asset Management Companies shall provide an option to the investors subscribing to mutual fund units on or after August 1, 2022 to submit either the nomination form or the declaration form for opting out of nomination in physical or online as per the choice of the unit holder(s).

• In case of physical option, the forms shall carry the wet signature of all the unit holder(s).
• In case of online option, instead of wet signature(s) of all the unit holder(s), AMCs shall validate the forms:

• Using e-Sign facility recognized under Information Technology Act, 2000; or
• Through two factor authentication (2FA) in which one of the factors shall be a One-Time Password sent to the unit holder at his/her email/ phone number registered with the AMC.

This circular is issued to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Varsha Laur, Audit Associate, SW India