SEBI: Big relief to mutual fund and demat account holders, now account will not be closed on 31st December, SEBI gave big relief
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SEBI Extended Last Date: Market regulator SEBI has given big relief to demat and mutual fund account holders. The institute extended the deadline for adding nominees for demat and mutual fund account holders till June 30, 2024 next year. Till now the deadline for nominating a beneficiary or opting out by submitting the declaration was kept till December 31. Securities and Exchange Board of India (Securities and Exchange Board of India)SEBI)’s move is aimed at helping investors secure their assets and hand them over to their legal heirs. In view of the applications received from market participants, SEBI said in a circular that for ease of compliance and convenience of investors, it has been decided to extend the last date for submission of ‘choice of nomination’ for demat accounts and mutual fund folios to June 30, 2024. The decision has been taken. Along with this, SEBI asked asset management companies (AMCs), depository participants and registrars and transfer agents (RTAs) to encourage demat account holders and mutual fund unit holders to enroll or opt out by sending emails or SMS every fortnight. Is. Let us tell you that earlier the last date for nomination was 30th September.
What is the new rule of SEBI?
According to the new SEBI rules, new investors will have to give ‘nomination’ for their securities while opening trading and demat accounts or opt for an exit through a declaration form. If existing investors fail to meet this deadline, their folios will be frozen and they will not be able to withdraw their investments. Besides this, they will not be able to trade in the stock market. Additionally, investors’ demat accounts or mutual fund folios are ‘frozen’ until they enroll or opt to exit.
SEBI had given one year’s time
The Securities and Exchange Board of India, in its July 2021 order, had asked all existing eligible trading and demat account holders to be provided the option of nomination on or before March 31, 2022. Later it was extended by one more year till March 31, 2023. In respect of mutual fund unitholders, the regulator, in its circular dated June 15, 2022, had made it mandatory for mutual fund customers to submit nomination statement or declaration for exiting nomination on or after August 1, 2022. It was extended till October 1, 2022 and then till March 2023. Following requests from market participants, it was decided to implement the provision of freezing folio and demat accounts from September 30, 2023 instead of March 31, 2023. Market experts say that in the past many investor accounts have been opened without nominating anyone. In such a situation, there is difficulty in transferring the property to the rightful heir. In such a situation, this step is very good and it will remove the difficulties in transfer of property.
what is demat account
Demat Account – An account that provides the facility to borrow and buy securities in the stock market, but does not allow physical viewing and touching of the existing shares. Demat account provides an interface between an individual or a corporation through which trading can be done in the stock market.
There are two major types of such accounts:
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Demat Account: This account is given to the person who has purchased the shares, so that they can be preserved in their existing form in electronic form as per the stock exchange system.
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Trading Account: This account allows a person to trade in the stock market. Through this a person can buy and sell shares.
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These accounts are managed by various financial institutions and follow the rules and regulations of the stock market in India. Demat account is a virtual representation of the stock market that helps individuals preserve their share wealth.
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