A mutual fund folio is an asset. Like any asset a mutual fund folio needs a plan for what happens after the holder is gone. Nomination is that plan. Nomination tells the fund house who is authorised to claim the units and nomination gives the family a route instead of a legal maze.
The rules around nomination changed in 2026. Nomination is now mandatory for single‑holder folios and the process for adding or changing a nominee has been simplified. Understanding the framework takes less time than the process it prevents.
why nomination matters
Without a nominee the family has to prove they are the heirs. That means a succession certificate, a heir certificate or probate of a will. These documents take months involve courts and lawyers and cost money. The family is dealing with all of it during a time and the mutual fund units are frozen until the paperwork is complete.
With a nominee the process is simpler. The nominee submits a transmission request form, a death certificate and proof of identity and bank details. The units are. The proceeds are paid out. The nominee is treated as the person authorised to receive the assets, which discharges the AMC’s liability.
One distinction matters. A nominee is not automatically the owner of the assets. The nominee receives the money as a trustee for the heirs. If there is a will that says otherwise the will prevails. Nomination and succession are separate. They should be consistent with each other.
what changed in September 2026
SEBI simplified the nomination framework effective September 1 2026. The key changes are :
- Nomination is mandatory for single‑holder folios. If an investor opens a folio in a single name the investor must either nominate someone or submit a formal opt‑out declaration.
- Jointly held folios remain optional. Nomination is not compulsory for folios held in names.
- Up to three nominees are allowed. The investor can name one, two or three people.
- Percentage share is optional. If multiple nominees are named without specifying shares the units are divided equally among them.
- Witness signature is no longer required for nomination forms signed normally. A witness is needed only if the investor uses a thumb impression.
- Digital submission is now standard. Online nomination can be completed using a signature Aadhaar‑based e‑sign or OTP verification on the registered mobile number and email.
how to add a nominee
The route depends on where the folio’s held. For non‑demat mutual fund folios the investor can use MFCentral, the RTA portal (CAMS or KFintech) the AMC website or the investment app.
Through MFCentral. Log in using PAN and the registered mobile number or email. Go to service requests, select nomination or nominee update choose the folio enter the nominee details and complete the OTP or e‑sign verification. MFCentral is the platform for all mutual fund folios regardless of the AMC.
Through CAMS or KFintech. If the folio belongs to a CAMS‑serviced or KFintech‑serviced AMC the RTA portal can be used directly. The process is the same: enter PAN validate with OTP select the folio choose nomination opt‑in add the nominee details and submit.
Through the AMC website or app. Log in go to the profile or folio section, nominee update enter the details and complete the verification.
For demat funds. If the units are held in a demat account the nomination is recorded with the depository participant (DP) or broker not the AMC. The demat account nomination applies to the mutual fund units held in that account. This is separate from any non‑demat folio nomination.
what details are needed
The information required has been simplified. The mandatory fields are the nominee’s name and relationship with the investor. If the nominee is a minor the date of birth is also required, along with the guardian’s details. Other details such as PAN, Aadhaar, mobile number, email and address are optional. May be requested by some platforms.
If multiple nominees are named the percentage share, for each should be specified. If it is not specified the units are divided equally among all nominees.
how to. Update a nominee
Changing a nominee is like adding a nominee. A fresh nomination replaces the one for that folio. The steps are the same: log in through MFCentral, the RTA portal, the AMC website or the app select the folio, edit or remove the nominee add the new nominee details and finish the verification.
You can change a nominee many times as you want while the folio is active. There is no limit.
what happens if a nominee dies before the investor
If a nominee dies before the investor the nomination simply ends. The account is then without a nominee. Nothing changes in the investor’s access so most people do not notice it has happened.
The problem appears later. If the investor dies without a nominee the legal heirs must go through a long process to get a succession certificate or probate. The fix takes five minutes: log in and add a new nominee.. The investor must still be alive to do it.
common mistakes to avoid
Nominating and never checking. Marriage, childbirth, divorce or a nominee’s death can make an old nomination wrong. The nominee should be reviewed after every life event and at least once a year.
Assuming one nomination covers everything. A nominee registered at a bank does not automatically become the nominee for funds, shares or insurance. Every financial product and institution has its nomination process. Demat and non‑demat mutual fund holdings may also have nomination records.
Naming a minor without a guardian. A minor can be a nominee. The money stays until the child turns 18. The guardian details must be. The guardian will receive the money on the minor’s behalf.
Confusing a nominee with a heir. Nomination is a way to receive the assets. It does not override succession laws or a will. If the intent is for the nominee to be the owner the will must state that clearly.
what retail investors should take from this
Nomination is a task that stops months of legal work. The process is now simpler than ever. It can be finished entirely online for most folios.
The mandatory rule for single‑holder folios means new investors cannot skip it. Existing investors should check their folios confirm the nominee is up to date and update it if circumstances change.
The common mistake is treating nomination as a one‑time task. It is not. Nomination is a detail that must be reviewed whenever life changes and the cost of forgetting falls on the people the investor was trying to protect.
FAQs
1. Is nomination mandatory for mutual fund folios?
From September 1 2026 nomination is mandatory for all single‑holder mutual fund folios. The investor must. Name a nominee or submit a formal opt‑out declaration. Jointly held folios remain optional.
2. Can I nominate than one person?
Yes. Up to three nominees can be named per folio. If several nominees are named and no percentage is given the units are split equally among them.
3. What happens if my nominee dies before me?
The nomination lapses automatically. The folio is then without a nominee. Nothing changes in the investor’s access so it is easy to miss. If the investor then dies without a nominee the legal heirs face a longer process to claim the units.
4. Does a nominee become the owner of the mutual fund units?
Not necessarily. The nominee receives the units or proceeds as a trustee, for the heirs. If a will says otherwise the will takes priority. Nomination and succession are separate. They should stay consistent.
