Nomination: the two minute task most investors skip

Why this exists

When an investor dies without a nominee on record, their family faces a legal process to claim what is theirs. Succession certificates, court time, legal costs, and delays measured in months or years. Meanwhile the money sits frozen.

India holds a very large amount of unclaimed financial assets, much of it because a form was never filled in. SEBI has been progressively tightening these rules to reduce it, and the latest framework is the clearest yet.

The task itself is trivial. It is skipped because it is dull and because thinking about it is unpleasant. Those are the only two reasons.

What changes on 1 September 2026

SEBI has revised the nomination framework for demat accounts and mutual fund folios, effective 1 September 2026. The revised rules supersede earlier circulars.

• Mandatory for new single-holder accounts. Opening a new single-holder demat account or mutual fund folio requires either naming a nominee or submitting a formal opt-out declaration. The field cannot be left blank.
• Joint accounts stay optional. Nomination remains a choice for jointly held accounts and folios. Any addition or change requires the consent of all joint holders.
• Up to three nominees. You can name up to three people and assign each a percentage share.
• Much less paperwork. Only the nominee name and their relationship to you are mandatory. PAN, Aadhaar, passport number, email and mobile are now optional. A date of birth is required if the nominee is a minor.
• No witness needed for a normal signature. A witness is required only if you sign using a thumb impression, in which case two are needed.
• Change it as often as you like. Nominations can be modified, updated or cancelled any number of times.

If multiple nominees are named, they can either continue with the same account after the investor dies, or open separate accounts for their respective shares.

A nominee is not automatically the owner

This distinction causes real family disputes and is worth understanding properly.

A nominee is the person authorised to receive the assets when you die. Their role is to make the transfer straightforward, so the institution knows who to hand things to without a court instructing it.

Who ultimately owns those assets is decided by your will, or if there is no will, by the succession law that applies to you. A nominee can end up holding assets on behalf of the legal heirs rather than keeping them.

In most families the nominee and the intended beneficiary are the same person and nothing arises. Where they differ, or where a family is complicated, the gap between the two is where disputes happen.

The practical conclusion: nomination speeds up the transfer, a will decides the outcome. Doing both, and keeping them consistent with each other, avoids nearly all of the difficulty.

How to actually do it

For a demat and trading account, log in to your broker and look under profile or account settings for nomination. Most brokers support this fully online with an OTP.

For mutual funds, it is handled per folio. You can do it through the registrar, such as CAMS or KFintech, or through the platform you invest with. Doing it at the registrar covers all folios held with the fund houses they service, which is usually faster than doing each one separately.

What you need: the nominee full name and their relationship to you, plus a date of birth if they are a minor. If you name more than one, decide the percentage split so it totals 100.

While you are there, a short checklist worth completing in the same sitting:

• Add nominees to your demat account and each mutual fund folio.
• Check your bank accounts and fixed deposits separately, since those follow banking rules rather than SEBI ones.
• Check your EPF and NPS nominations, which are separate again.
• Tell someone the accounts exist. A perfectly completed nomination is useless if nobody knows to look.
• Review it after any major life event, such as a marriage, a birth or a death in the family.

That last point is underrated. Families most often lose track of investments not because of paperwork but because nobody knew an account existed. A single written list of where things are held, kept somewhere your family can find it, is worth more than any form.