SEBI eliminates freezing of accounts, folios of investors and nominee

The Securities and Exchange Board of India SEBI has announced significant modifications to the criteria for submitting the choice of nomination for demat accounts and mutual fund foliosSEBI has issued a new circular extending the deadline for existing investors to submit their option of nomination for demat accounts and mutual fund folios till June 30 2024SEBI has decided to eliminate the freezing of accounts and folios for existing investors who have not submitted nomination details in an effort to simplify investment procedures and improve investor convenienceThis extension ensures that demat accounts and mutual fund folios will not be frozen for debits due to nonsubmission of nomination details This move is intended to avoid any disruption in investors access to their funds and assetsInvestors who own stocks in physical form but have not yet updated their PAN choice of nomination contact information bank account information or specimen signature will no longer suffer restrictionsBeginning April 1 2024 these securities holders will be able to receive payments electronically including dividends interest and redemption amountsAs per reports from ANI SEBI has simplified the process for existing investors by reducing the number of essential forms for amending nomination details to just threeListed businesses will notify security holders of such payments electronically provided they comply with the new standardsThis move is part of SEBIs attempts to expedite the compliance process and encourage more investors to submit nomination informationAccording to SEBIs circular existing investors and security holders must update their option of nomination to enable smooth transmission of securities and prevent the buildup of unclaimed assets in the securities marketDespite the eased measures for current investors all new investors and unitholders are still required to offer the choice of nomination for demat accounts and mutual fund folios with the exception of jointly held accounts and foliosThe formats for offering or opting out of nomination are explained in the circulars Annexures A and B as reported by ANIThis circular demonstrates SEBIs commitment to protecting investor interests and developing a streamlined transparent securities marketDespite the loosening of certain requirements SEBI urges investors to complete the nomination process for their own benefitSecurity holders who have physical folios can now file grievances or service requests to the Registrar and Transfer Agents RTAs without presenting a option of nominationDividend interest and redemption payments will also flow without these specificsDepository participants Asset Management Companies AMCs and RTAs will send out biweekly reminders via email and SMS to demat account and mutual fund unit holders who have not given their nomination informationWhen entering into demat or mutual fund accounts investors will also see a popup reminder to amend their nomination information This feature will be accessible beginning October 1 2024The reports from the agency states that the terms of the revised circular with the exception of the popup reminders will take effect immediately Clause 7 which applies to popup reminders will take effect on October 1 2024Stock exchanges depositories AMCs RTAs and listed firms must update their byelaws business rules and regulations to reflect the new legislationThey must also convey the new guidelines to their people and monitor compliance with the modified regulationsSEBI hopes that by simplifying the nomination submission process it would increase investor convenience and encourage greater compliance with critical regulatory standards