SEBI went from 10 nominees to 3. What changed for your demat and fund nominations
The 2025 rules let you name up to 10 nominees on a demat account or mutual fund folio. A SEBI circular in force since 1 September 2026 brings that back to 3, makes nomination the default for single holders, and drops most of the paperwork.
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SEBI issued a circular on 29 May 2026 titled Modified Norms for Nomination in Demat Accounts and Mutual Fund Folios. It came into effect on 1 September 2026 and replaces 18 earlier circulars on nomination, including the one dated 10 January 2025 that set the limit at 10.
What changed
| Rules from 1 September 2026 | |
|---|---|
| Maximum nominees | 3, down from 10 under the January 2025 circular (para 5.1) |
| New single-holder account | Nominate, or submit an opt-out declaration (para 4.1) |
| Joint account | Nomination optional (para 4.2) |
| Required details | Nominee's name and relationship; date of birth only for a minor (para 7a) |
| No percentages given | Equal split; any odd lot goes to the first nominee (para 7b) |
SEBI's March 2026 consultation had proposed cutting the limit from 10 to 4. The final circular settled on 3 (para 5.1), the same number allowed before 2025.
What the circular says, point by point
- Up to 3 nominees. After the holder's death, nominees can keep the same account or folio or open their own for their share (para 5.2).
- Joint holders must all agree. Adding or changing a nominee needs the consent of every joint holder, whatever the mode of operation (para 4.3).
- Online or on paper. Online nominations are validated by a digital signature, an Aadhaar or other e-sign, or two-factor authentication with an OTP to your registered mobile and email. On paper, a wet signature needs no witness; a thumb impression needs two (para 6.2).
- Change it as often as you like. Each change gets an acknowledgement (paras 9.1 and 9.3).
- Your statement will show it. Each holding statement prints either the nominees' names or simply "Yes" or "No", as you choose on the form (para 10.1).
- No nominee means reminders. Depository participants and mutual fund registrars must email and text twice a year, and show a pop-up on the first login of the day, until you nominate (para 10.2).
- It covers old accounts too. The rules apply to existing accounts and folios, not only new ones (para 11).
What this means for a family with several accounts
The cap of 3 applies per account or folio, not per person. A family with assets across, say, two demat accounts and fifteen folios can still spread nominees by naming different people on different accounts, but each one holds at most three names.
Three practical checks:
- Look at your latest statements. If a holding shows "No" against nomination, it has none.
- Joint accounts are the gap. Nomination is optional there, so many joint accounts have none. If both holders die together, a nominee is what the depository or fund house acts on.
- Percentages matter more now. With at most three names, a split that isn't written down defaults to equal shares.
A nomination tells the depository or fund house whom to transfer the holdings to. How those holdings are finally shared among heirs can still depend on a will or succession law, so it is worth reading the two together with a lawyer.
Questions
- How many nominees can I have for a demat account or mutual fund?
- Up to 3 per demat account or mutual fund folio, under SEBI's circular of 29 May 2026, in effect from 1 September 2026.
- Is nomination mandatory for mutual funds and demat accounts?
- For new accounts held by one person, yes, unless you submit an opt-out declaration. For joint accounts it is optional.
- What happens if I don't specify percentages for my nominees?
- The holdings are split equally among the nominees, and any odd lot left over goes to the first nominee named.
- Do the new nomination rules apply to my existing folios?
- Yes. The circular applies to existing accounts and folios as well as new ones.
- Can I change my nominee?
- Yes, any number of times, online or on paper. Every joint holder must consent to a change.
Sources
- SEBI circular, 29 May 2026: Modified Norms for Nomination in Demat Accounts and Mutual Fund Folios
- The same circular as a PDF
- Moneylife: SEBI allows up to 10 nominees (January 2025 circular)
- IANS: SEBI mulls easing nomination norms (March 2026 consultation)
Compound is analysis, not investment advice. Reva Money is not a SEBI-registered investment adviser.
