The Securities and Exchange Board of India (“SEBI”) has amended the SEBI (Depositories and Participants) Regulations, 2018, bringing in significant changes to the nomination process for beneficial owners (Demat account holders). This amendment is introduced through the SEBI (Depositories and Participants) (Third Amendment) Regulations, 2024, with the notification published on December 4, 2024.
Key Highlights of the Amendment:
Nomination for Securities: Demat account holders can now nominate a person to whom their securities will transfer in the event of their death.
Authorization in Case of Incapacity: Demat account holders can nominate a person who will be authorized to handle transactions on their behalf if they become incapacitated.
Joint Account Nomination: For joint Demat accounts, all account holders can collectively nominate a person to inherit the securities in case all joint account holders pass away.
No Liability for Depositories/Participants: Depositories and participants are not liable for actions taken based on valid nominations made by the account holders.
This notification ensures better financial planning for investors and smooth management of securities during unforeseen events like death or incapacitation. It’s a progressive step by SEBI to enhance investor protection and streamline operations in the securities market. Demat account holders should act promptly to review and update their nominations to align with the new regulations.
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