SEBI/HO/OIAE/OIAE_IAD-3/P/ON/2025/01650 January 10, 2025

2 · 1. Rule of survivorship

2 · 1.1. In case of joint accounts / holdings, upon demise of one or more joint holder(s), the regulated entity shall transmit the assets held to the surviving holder(s) vide name deletion

2 · 1.2. The surviving member(s) shall receive the assets as owner(s) and not as a trustee.

2 · 1.3. Surviving joint holders shall be entitled to continue with, or change or cancel the nominations made previously.

2 · 1.4. The mode of operation (of the joint account), namely that of the first named holder OR anyone or survivor OR either or survivor basis OR joint, etc. shall be un affected by the rule of survivorship.

2 · 1.5. The norms applicable for operation of the account / folio shall be mutatis mutandis applicable for nomination.

1 · Amendments to SEBI (Depositories and Participants) Regulations, 2018 and SEBI (Mutual Funds) Regulations, 1996

2 · 2. Simultaneous passing away of joint holders

2 · 2.1. In case of joint accounts when all joint holders simultaneously pass away, the regulated entity shall transmit the assets in the account / folio to the registered nominee(s) for effecting its due discharge.

2 · 2.2. In absence of nomination, the regulated entity shall transmit the assets in the account / folio to either;

2 · 3. In case of accounts / folio held by Hindu Undivided Family (HUF), upon the death of the Karta as recorded, the new Karta as constituted under applicable law, would be entitled to operate such an account/folio. In the absence of new Karta, the regulated entity shall effect transmission of account / folio as per dissolution deed and other criteria defined by the respective SRO / industry body in consultation with the SEBI.

2 · 4. The nominees(s) shall receive the assets of deceased sole account / sole holder(s) as trustee on behalf of legal heir(s) of deceased holder(s) thereby effecting due discharge of concerned regulated entity.

2 · 5. Legal heir(s) of nominee shall not be eligible to inherit the assets of the investor, if the nominee predeceases the investor.

2 · 6. Upon demise of one of the nominees prior to the demise of the investor and if no change is made in the nomination, then the assets shall be distributed to the surviving nominees on pro rata basis upon demise of the investor, as illustrated in Nomination Form in Annexure A.

2 · 7. In case of any subsisting credit facilities secured by a duly created pledge, the regulated entity shall obtain due discharge from the creditors prior to transmission of assets to the nominee(s) or legal heir/s / legal representative/s, as the case may be.

2 · 8. Nomination shall be mandatory for single holding only. The requirement of nomination shall be optional for jointly held accounts / folios. 4

2 · 9. Guardrails for integrity / authenticity / verifiability of nomination:

2 · Based on the commorientes rule, which is also reflected in section 21 of the Hindu Succession Act: Presumption in cases of simultaneous deaths. —Where two persons have died in circumstances rendering it uncertain whether either of them, and if so which, survived the other then, for all purposes affecting succession to property, it shall be presumed, until the contrary is proved, that the younger survived the elder.

3 · SEBI Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2022/65 titled, "Simplification of procedure and standardization of formats of documents for transmission of securities" dated May 18, 2022 and AMFI Circular Ref. No. 135/BP/110/2023-24 titled, 'AMFI Best Practices Guidelines: Updated Guidelines on Transmission of Units' dated January 31, 2024.

4 · As already provided in IMD Circular Ref. No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/29 titled, "Nomination for Mutual Fund Unit Holders – exemption for jointly held folios" dated April 30, 2024 and MIRSD Circular Ref. No. SEBI/HO/MIRSD/POD-1/P/CIR/2024/81 titled, "(a) Ease of Doing Investments- Non-submission of 'Choice of Nomination', (b) Only 3 fields to be provided mandatorily for updating Nomination Details" dated June 10, 2024.

2 · 10. The regulated entities shall provide option to the investor to submit nomination form either online or through physical / offline mode with the following guardrails;

2 · 10.1. Online nomination: the regulated entities shall validate the nomination through:

2 · 10.2. Physical / offline nomination: The regulated entity shall verify the signature(s) as per the mode of holding, while registering or changing nomination. Where an investor affixes his/her thumb impression on the nomination form, then the same shall be witnessed by two persons and details of such witnesses shall be duly captured in the nomination form. However, there shall be no such requirement of witnesses in case of nomination forms carrying wet / digital / e-sign signature of the investor 5 .

2 · 11. Regulated entities shall provide acknowledgement to the investor for each and every instance, irrespective of the mode of nomination. They shall maintain physical or electronic records, as the case may be, of the nomination, its acknowledgement etc. for a period of eight years after transmission of the folio/ account.

2 · 12. Regulated entities shall not place any restrictions on the number of instances an investor can make, change or cancel his/her nomination.

2 · 13. Regulated entities shall provide in their periodic statement of holding, either the

2 · 14. In case the investor specifies multiple nominees, then he / she shall also specify the percentage share for each nominee. In absence of such specification, the regulated entity shall apportionment the assets equally among all the nominees. In case of demise of the investor and any one of the nominees, the regulated entities shall distribute the assets pro rata to the remaining nominees, as per paragraph 2.6 above.

5 · As already provided in the Master Circular for Depositories Ref. No. SEBI/HO/MRD/MRD-PoD-2/P/CIR/2023/166 dated October 06, 2023.

6 · Ibid 2

7 · This serves to aid contact-ability and identification of the nominee/s upon death of the investor and is not to be construed as requiring KYC of the nominees.

2 · 15. Investor/s shall have the option to specify guardian/s when nominee/s is / are minor/s.

2 · 16. Completion or updating of KYC of the nominee/s during the lifetime of the investors shall be optional.

2 · 17. In absence of nomination, the regulated entity shall transmit the assets in the account / folio to either the legal heir(s) or legal representative(s) of the holders as per the rules of intestate succession or as per the Will of the latter, as the case may be, after following the prescribed procedure 6 .

3 · Section B: Revamped Norms

3 · 1. Personal Identifiers of nominee(s)

3 · 1.1. Investors shall mandatorily provide the following;

3 · 2. Investors can nominate up to 10 persons in the account / folio.

3 · 3. Power of Attorney (POA) Holder(s) of the investor cannot nominate .

3 · 4. Upon transmission of joint account / folio, the nominees shall have the option to either continue as joint holders with the other nominees or open separate single account / folio for their respective portion.

3 · 5. Nominee to act on behalf of incapacitated investors

3 · 5.1. The regulated entity shall provide the investors having single holding / account / folio, the option to;

3 · 6. Direction to AMCs / their RTAs and DPs:

3 · 6.1. The broad guidelines to be followed for operation of accounts in case of an incapacitated investor are, as follows:

3 · 6.2. In order to have uniformity in dealing with incapacitate investors and those with special needs or sick or old investors in the securities market, the Depositories and AMFI shall put in place common Standard Operating Procedure (SOP). This SOP 9 shall, inter-alia, have adequate guardrails and shall be made available on their websites as well as that of their constituents.

3 · 6.3. Notwithstanding the foregoing, Power of Attorney holder can continue to transact in the account / folios of an investor, subject to the applicable norms.

3 · 7. Transmission to nominee(s):

3 · 7.1. For transmission of assets to the registered nominee(s), the regulated entity shall require only the following:

8 · The Hon'ble Supreme Court has held in AIR 1950 Supreme Court, 265, that there must be physical contact between the person who is to sign and the signature can be by means of a mark. This mark can be placed by the person in any manner. It could be the toe impression, as suggested. It can be by means of mark which anybody can put on behalf of the person who has to sign, the mark being put by an instrument which has had a physical contact with the person who has to sign.

9 · The SOP can also have additional norms, illustratively for transmission of assets of HUF as per dissolution deed, micro procedure for alternate method when electronic acknowledgement fails, transfer from nominee to legal heir, bank mandate form in transmission etc.

3 · 7.2. Transfer to Legal heir(s) / representatives from nominee(s):

4 · 7.2.1 Regulated entities shall facilitate / extend co-operation to transfer assets from the nominee(s) to the legal heir(s) of an investor, as and when approached by either party. In this regard, the regulated entity shall obtain suitable declaration from the nominee(s) while effecting transmission, as follows;

4 · 7.2.2 The regulated entity shall be fully discharged from its liabilities upon transmission of assets to the nominee(s).

3 · 8. In case of joint holdings, the regulated entity shall not seek any documentation including related to KYC, indemnities or undertakings from the surviving joint holder, except copy of the Death Certificate of the deceased.

3 · 9. In accounts / folios with multiple nominees, where some portion is transmitted to the nominee(s) and the remaining portion is unclaimed by the other nominee(s) the DP / AMC shall allow the unclaimed portion to continue in the existing account / folio and not permit any other transactions in such accounts / folio, other than transmission to the remaining nominee(s).

3 · 9.1. Further, the DP shall flag such demat accounts for additional due diligence and furnish periodical report of such accounts to the concerned Depositories, and;

3 · 9.2. AMC shall treat any money payable / attributable to such folio at par with the extant norms pertaining to treatment of unclaimed money 10 and flag such folios for additional due diligence.

3 · 10. Regulated entities shall have the following online mechanism for existing and new investors, who want to opt-out of nomination;

10 · Provisions relating to 'Unclaimed Redemption and Dividend Amount' in Chapter 14 of the Master Circular on Mutual Funds (No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024)

11 · As in Circular Ref. No. SEBI/HO/MIRSD/POD-1/P/CIR/2024/81 dated June 10, 2024

12 · The norms stipulated for video capture in live environment, liveliness check, etc., in the SEBI Circular No. SEBI/HO/MIRSD/SECFATF/ P/CIR/2023/169, dated October 12, 2023, would be applicable.

13 · Circular Ref. No. SEBI/HO/MIRSD/POD-1/P/CIR/2024/81 titled, "(a) Ease of Doing Investments- Non-submission of 'Choice of Nomination', (b) Only 3 fields to be provided mandatorily for updating Nomination Details" dated June 10, 2024.

10 · 1. the status of readiness of all their constituents to implement this circular, by February 20, 2025.

10 · 2. confirmation that the formats of the 'nomination form' and the 'Opt-out' form of each of their respective constituents, both in physical and digital mode, as the case may be, are as par with the respective formats provided by SEBI 14 , by March 15, 2025.

10 · 3. status of implementation of the provisions of this circular by their constituents by May 01, 2025 and thereafter, as may be specified.

14 · Annexures A of this circular and Circular No. SEBI/HO/MIRSD/POD-1/P/CIR/2024/81 dated June 10, 2024, respectively.