The Securities and Exchange Board of India (Sebi), on September 26, 2023, extended the deadline to add nominees for demat accounts and submit PAN and KYC details for physical security holders till December 31, 2023. This extension comes after Sebi warned of freezing folios by September 30 if the above conditions were unmet.
Sebi had initially set the deadline of September 30, 2023, for demat account holders to either nominate their accounts or opt out of nomination altogether. For demat accounts, Sebi has extended the deadline for submission of 'choice of nomination' to December 31, 2023.
This condition applies to new and existing account holders. Sebi took this initiative to ensure that the proceeds from the account reach the legal heirs or the right beneficiary. The number of demat accounts in India crossed 12.7 crore in August.
The same condition was earlier applicable for nomination to trading accounts. However, in response to representations from exchanges, depositories, brokers' associations, and other stakeholders, Sebi has now made submitting the 'choice of nomination' for trading accounts voluntary to facilitate ease of doing business.
Sebi's March 16, 2023, circular had stipulated that folios for physical securities would be frozen if the Permanent Account Number (PAN), nomination, contact details, bank account details, and specimen signature were not submitted by September 30, 2023. However, Sebi has extended the deadline to submit these details to December 31, 2023.
Sebi has instructed the stock exchanges, depositories, the Registrar and Transfer Agents (RTAs), and the listed companies to take necessary steps to implement its latest circular's provisions and monitor compliance with its directives.
Investors can take advantage of the extended deadlines to ensure compliance with these regulations. To ensure proper nomination, Sebi, in an earlier circular, had said that mutual fund investors must provide nominees for their folios or opt out of nomination before September 30, 2023, if not done already. Failure to do so will result in restrictions on transactions like redemptions, systematic withdrawal plans (SWP), switches, and systematic transfer plans (STP) from October 1, 2023.