Investors to have a choice of providing nomination in demat account: Sebi

Investors who are opening new trading and demat account from October 1, will now have a choice of providing nomination or opting out of the nomination, according to the securities and exchange board of India (Sebi). The Sebi circular has issued a ‘declaration form’ which is basically a format for nomination form and opting out of the nomination.

The deadline for existing eligible trading and demat account holders to provide the choice of nomination is March 31, 2022. The trading and demat accounts will be frozen if they fail to do so.

The new framework allows the trading members and depository participants to activate new trading and demat accounts from October 1, 2021, upon receipt of such forms.

A wet signature of the account holder is required on the nomination and declaration form. In this case, a witness signature is not needed.

In case of an online nomination and declaration form, which may be signed using an e-sign facility, a witness signature will not be required.

However, if the accountholder affixes thumb impression (instead of wet signature), then it is mandatory to have a witness’ signature in the forms.

Intermediaries will have to ensure that adequate systems are in place including for providing an e-sign facility. All necessary steps are to be taken to maintain confidentiality and the safety of client records.