SEBI’s New Nomination Rules for Demat and Mutual Funds

If you have opened a demat account or started a new mutual fund since 1 September 2026, you will have seen a new step: add a nominee, or sign a declaration that you do not want one. SEBI’s revised nomination rules are now in force. They make the process simpler, cut the paperwork and aim to spare families the long struggle to claim investments after a death. Here is what changed and what you should do.

The short answer

• From 1 September 2026, every new single-holder demat account and mutual fund folio must have a nominee or a signed opt-out declaration.
• You can name up to three nominees and split the holding between them.
• Only the nominee’s name and relationship are required (plus date of birth if the nominee is a minor).
• No witness is needed when you sign on paper, and you can do it all online with Aadhaar e-sign or OTP.
• Existing nominations stay valid. Old accounts are not frozen, but you will get regular reminders if you have no nominee.

What changed

Rule	From 1 September 2026
New single-holder accounts and folios	Nominee or opt-out required, on a standard form
Joint accounts	Nomination optional; all holders must agree to any change
Number of nominees	Up to 3 per account or folio
Details needed	Name and relationship only; date of birth for a minor. Contact details, an ID number and the percentage share are optional.
Witness (paper form)	Not required with a signature; two witnesses only for a thumb impression
Online	Aadhaar e-sign, digital signature, or OTP to mobile and email
No nominee on file	SMS and email reminders twice a year, plus prompts when you log in

The rules come from SEBI’s circular of 29 May 2026, which says the aim is to “enhance the ease of investor onboarding and ease the nomination process”.

Nominate or opt out?

• Add nominees

  Name up to three people and, if you like, the share each gets. Leave the shares blank and they are split equally.

• Opt out

  Sign or click “agree” on a standard declaration. You can add a nominee later at any time.

Opting out is allowed, but it leaves your family with more work. Without a nominee, your heirs usually need a succession certificate, a probated will or other legal papers to claim your shares and funds, which can take months.

What happens to your investments after a death

1. Step 1

   Nominee informs

   The nominee tells the broker (depository participant) or fund house, with the death certificate and their own KYC.

2. Step 2

   Transmission

   Holdings are moved to the nominees, in the shares you set, or equally if you did not.

3. Step 3

   Keep or split

   Nominees can each open their own demat account or folio, or continue in the same one for their shares.

If the shares do not divide exactly, the odd units go to the first nominee.

How to add or change a nominee

1. Demat account: log in to your broker’s app or website, open the profile or nominee section, add up to three nominees with their share, and sign with Aadhaar OTP.
2. Mutual funds: use the fund house’s website, the registrar’s portal (CAMS or KFintech), or MF Central to update all your folios at once.
3. Check it worked: your broker or registrar sends a confirmation by email or SMS. Your consolidated account statement (CAS) also shows the nomination status.

You can add, change or cancel nominees as many times as you like, and it does not cost anything.

Who should act now

If you…	Do this
Opened a new account after 1 September	You have already chosen. Check the nominee details are correct.
Have an older account with a nominee	Nothing is required. Update it if your family situation has changed.
Have an older account with no nominee	Add one. It takes about five minutes online.
Hold jointly with a spouse	Nomination is optional, but useful if both holders die together. All holders must agree.
Want a minor as nominee	Allowed. Add the child’s date of birth; a guardian can be named.

Frequently asked questions

Is nomination mandatory for existing investors? No. The new rule applies to single-holder accounts and folios opened on or after 1 September 2026. Existing accounts keep working, with or without a nominee, but you will get reminders if there is none.

Can I have different nominees for my demat account and my mutual funds? Yes. Each demat account and each folio has its own nomination.

Do I need a witness? Not if you sign the form. Two witnesses are needed only when you use a thumb impression. Online nominations use Aadhaar e-sign or OTP instead.

What if I do not specify shares between nominees? The holdings are divided equally, and any odd units go to the first nominee.

Can I change my nominee later? Yes, any number of times, free of charge.

Sources

• SEBI circular SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2026/12676, 29 May 2026: sebi.gov.in
• Upstox, “Nomination rules for demat accounts, mutual funds to change from September 1, 2026”: upstox.com
• CorpLawUpdates, “SEBI modified nomination norms 2026”: corplawupdates.in
• MF Central (update nominees across mutual fund folios): mfcentral.com