Capital markets regulator SEBI has now made it optional to have a nominee for jointly-held mutual fund accounts
"Accordingly, it has been decided that the requirement of nomination ....for mutual funds shall be optional for jointly held mutual fund folios," the Securities and Exchange Board of India (Sebi) said in a circular.
The decision follows a comprehensive review of mutual fund regulations by a working group constituted by Sebi, which recommended various measures to facilitate business operations.
As per Sebi's circular, the requirement of nomination for jointly held mutual fund folios is now optional, simplifying the nomination process for investors. This change is expected to streamline the transmission process and reduce hassle, as surviving members can now become nominees, with the flexibility to assign nominees later.
In another significant move, Sebi has relaxed the provision regarding dedicated fund managers. For commodity-based funds like Gold ETFs and Silver ETFs, as well as funds participating in the commodities market, appointing a dedicated fund manager is now optional. Similarly, for overseas investments, the appointment of a dedicated fund manager is also optional.
Sebi has set a deadline of June 30, 2024, for existing individual mutual fund holders to nominate or opt out of nomination. Failure to comply with this deadline will result in the freezing of accounts for withdrawals.
Furthermore, Sebi has introduced measures to allow fund houses to appoint a single fund manager to oversee commodity and foreign investments, a move expected to reduce operational costs.
The introduction of a single fund manager for domestic and overseas/commodity funds aims to streamline fund management processes and reduce operational costs, aligning with Sebi's objective of promoting efficiency and ease of doing business in the mutual fund sector.
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