SEBI extends mutual fund nomination deadline

According to the latest circular, the deadline for adding a nominee or submitting a no-nomination form for your mutual fund investments has been extended from September 30, 2023, to December 31, 2023.

But you should not wait until the last minute.

Whether it's a mandatory requirement or not, every mutual fund investor should have a designated nominee. The absence of a nominee can lead to a complex legal process for your beneficiaries when attempting to claim your investments in your absence. Having a nominated beneficiary streamlines this transmission process.

In June 2022, the Securities and Exchange Board of India (SEBI) released a circular mandating mutual fund investors to nominate a beneficiary or opt-out by submitting a no-nomination form. This rule became effective for new investors in August 2022, while existing investors were granted an extension until March 31, 2023. Subsequently, the deadline was extended once more to September 30, 2023, for investors to submit their nomination details or opt-out, and it has now been further extended to December 31, 2023.

What happens if you fail to provide a nominee or submit a no-nomination form?
Your investment folios will be frozen. This will prevent you from making redemptions or withdrawals until the necessary details are provided. For guidance on adding or updating a nominee, click here.

On the other hand, September 30 is the deadline that applies to the following:

• Submission of Aadhaar for small-savings schemes
  The looming deadline of September 30, 2023, is crucial for those with investments in small-savings schemes such as the Senior Citizen Savings Scheme (SCSS), Sukanya Samriddhi Yojana (SSY), and more.
  
  Investors who have engaged in small-savings schemes must submit their Aadhaar details by September 30, 2023, if they did not do so when initially opening their accounts for these schemes. If you've opened your account on or after April 1, 2023, there's no need to worry, as your Aadhaar and PAN details should already be on record.

What happens if you fail to submit your Aadhaar?

• Your small savings scheme account will become inactive.
• Any accrued interest will not be credited to your bank account. This could be a significant setback, particularly for SCSS account holders who rely on quarterly interest payments.
  
  If you've opened an SCSS account through a private bank, chances are your Aadhaar details are already on record. Nevertheless, consider reaching out to your bank's relationship manager for added assurance.

• Changes to perpetual SIPs
  On August 18, 2023, the National Automated Clearing House (NACH) issued a circular stipulating that investors must specify a time period for their mutual fund investments. Starting from October 1, 2023, the maximum allowable time period for investment mandates will be capped at 30 years, rendering the perpetual SIP option obsolete.
  
  It's essential to note that existing perpetual SIPs, or those initiated before October 1, 2023, will remain unaffected. These changes exclusively apply to SIPs commenced after October 1, 2023.