New SEBI Nomination Rules 2026: Demat and Mutual Fund Nominees

Under the new SEBI nomination rules 2026, you can name up to three nominees for a demat account or mutual fund folio, and only each nominee’s name and relationship to you are mandatory. The rules come from a SEBI circular dated 29 May 2026 and apply from 1 September 2026. For single-holder accounts and folios opened on or after that date, nomination is required unless you expressly opt out; if you do not state percentages, the holdings are split equally among the nominees.

What the new SEBI nomination rules 2026 change

SEBI’s nomination framework for demat accounts and mutual fund folios has been revised several times in recent years. The 29 May 2026 circular replaces all the earlier ones with a simpler regime from 1 September 2026:

• Up to three nominees. You can name one, two or three people.
• Less paperwork. Only the nominee’s name and relationship are compulsory. Contact and identity details help the institution trace the nominee later, but they are optional.
• Default equal shares. If you skip percentages, each nominee gets an equal share. An odd unit or share that cannot be divided goes to the first-named nominee.
• Online or offline. Online nominations can be authenticated by digital signature, e-sign or two-factor authentication. For physical forms, a witness is no longer needed, except where a thumb impression is used.
• Change any number of times. You can modify or cancel a nomination whenever circumstances change.

Mandatory nomination and the opt-out

For a single-holder demat account or mutual fund folio opened on or after 1 September 2026, you must either nominate or expressly opt out. Silence is not an option. Opting out is lawful, but it means that after your death your family must prove heirship with fuller documents before the DP or AMC releases the holdings.

For joint accounts, nomination is optional. If you do add or change one, every joint holder must consent, whatever the mode of operation. On the death of one joint holder, the holdings first go to the surviving holder.

Existing accounts. If you nominated before the new SEBI nomination rules 2026, log in to your DP and each AMC or MF Central and check how the nomination now appears. Accounts that show “no nominee” are worth fixing now; this is a legal safeguard, not a view on any investment.

Nominee is not owner: what families must know

A nominee receives the holdings so that the depository or AMC gets a valid discharge. The nominee does not become the final owner against the legal heirs. The Supreme Court settled this for shares in Shakti Yezdani v. Jayanand Jayant Salgaonkar (14 December 2023): nomination under company and depository law is not a third mode of succession, and the nominee holds for those entitled under the will or the succession law. SEBI’s revised transmission framework, in force from August 2026, likewise treats nominees as receiving the assets as trustees for the legal heirs, and provides that if a nominee dies before the investor and the nomination is not changed, that nominee’s share goes to the surviving nominees in proportion.

Example: Anil, a Nagpur engineer, names his wife and two children as nominees in his demat account without percentages. Each gets one-third on transmission. But if Anil also has an elderly mother, she is a Class I heir under section 8 of the Hindu Succession Act, 1956 if he dies without a will, and can claim her share from the nominees. If Anil wants his mother excluded or a different split, he needs a valid will, not just a nomination. See how to write a will in India.

A five-minute nomination check

1. List every demat account and folio (your monthly CAS shows them).
2. Confirm that each has the nominees you want under the new SEBI nomination rules 2026, with the relationship correctly recorded.
3. Add contact details for nominees even though optional, so they can be reached.
4. State percentages if you want an unequal split.
5. Tell your nominees where the accounts are, and keep a family list.
6. Review after marriage, a birth, divorce or a death.

Bank deposits follow banking law, not these SEBI rules: see bank nomination vs legal heir.

Frequently asked questions

What are the new SEBI nomination rules 2026?

A SEBI circular dated 29 May 2026, effective 1 September 2026, allows up to three nominees for demat accounts and mutual fund folios. Only the nominee’s name and relationship are mandatory, holdings are split equally if no percentages are given, and new single-holder accounts must nominate or expressly opt out.

How many nominees can I add to my demat account?

From 1 September 2026, up to three nominees per demat account or mutual fund folio. You can change or cancel the nomination any number of times.

Is nomination mandatory for mutual funds from September 2026?

For single-holder folios opened on or after 1 September 2026, yes, unless the investor expressly opts out. For joint folios, nomination is optional, but all holders must consent to it.

Does the nominee become the owner of my shares after my death?

No. The nominee receives the holdings but holds them for the legal heirs or beneficiaries under a will, as the Supreme Court held in Shakti Yezdani v. Jayanand Jayant Salgaonkar (2023). A will is the way to control who finally owns them.

Quick quiz

The new SEBI nomination rules 2026, transmission and heirs’ rights are covered in Legal Rights of Investors (₹349), which teaches rights and remedies, not what to invest in. It gives a Lexfolio certificate of completion, not a professional qualification.

Sources

• SEBI circular on nomination for demat accounts and mutual fund folios, 29 May 2026 (effective 1 September 2026)
• SEBI revised framework for transmission of securities, July 2026 (effective 23 August 2026)
• Shakti Yezdani v. Jayanand Jayant Salgaonkar (Supreme Court, 14 December 2023)
• Companies Act, 2013, s.72; Hindu Succession Act, 1956, s.8

This page is for education and general information, not legal advice for a specific case. Law as on 31 October 2026.