SEBI Simplifies Demat Nomination Rules: No PAN or Aadhaar Needed for Nominee Registration from September 2026

New SEBI Guidelines Aim to Make Investment Transfers Easier for Families

Millions of Indians invest in stocks, mutual funds, and other market-linked instruments through demat accounts and mutual fund folios. However, a significant number of investors fail to nominate a beneficiary for their investments. This often creates complications for family members when they try to claim financial assets after the investor's death.

To address this long-standing issue, the Securities and Exchange Board of India (SEBI) has announced a new set of nomination guidelines that will simplify the process and help ensure that investments are transferred smoothly to rightful beneficiaries.

The revised framework is expected to reduce legal disputes, improve investor protection, and make succession planning easier for individuals and families.

New Nomination Rules to Take Effect from September 1, 2026

Under the updated regulations, every new single-holder demat account or mutual fund folio opened on or after September 1, 2026, must include a nominee.

If an investor chooses not to appoint a nominee, they will be required to submit a formal opt-out declaration. In other words, investors must either register a nominee or officially confirm their decision not to do so.

The move is designed to encourage greater participation in the nomination process and prevent financial assets from becoming difficult to claim in the future.

Joint Account Holders Exempt from Mandatory Nomination

SEBI has provided flexibility for investors holding joint demat accounts or joint mutual fund folios.

For such accounts, nomination will remain optional rather than mandatory. Joint holders can choose whether or not they wish to register a nominee based on their individual requirements.

This exemption recognizes the existing ownership structure in joint accounts, where surviving holders often have rights over the investments.

No Need for PAN, Aadhaar, Passport, or Mobile Details

One of the most significant changes introduced by SEBI is the simplification of nominee registration requirements.

Earlier, investors often faced paperwork and documentation hurdles while adding nominees. Under the new rules, only basic information will be required.

Investors will simply need to provide:

• Name of the nominee

• Relationship with the nominee

• Date of birth (if the nominee is a minor)

Importantly, documents and details such as PAN card, Aadhaar number, passport information, email address, mobile number, and other identity-related records will no longer be mandatory for nominee registration.

This simplified approach is expected to encourage more investors to complete the nomination process.

Investors Can Register Up to Three Nominees

SEBI has also increased flexibility by allowing investors to nominate up to three individuals for a single demat account or mutual fund folio.

If an investor appoints multiple nominees but does not specify the percentage share for each person, the investment value will automatically be divided equally among all registered nominees.

This provision ensures a transparent and fair distribution process while reducing confusion for legal heirs.

Witness Requirement Largely Removed

In another investor-friendly change, SEBI has relaxed documentation requirements by removing the mandatory witness signature requirement in most cases.

For forms signed normally by the investor, no witness signature will be necessary.

However, if the form is submitted using a thumb impression instead of a regular signature, a witness signature will still be required for verification purposes.

This step is expected to make the process faster and less cumbersome.

Greater Focus on Digital Nomination

To support digital adoption and improve convenience, SEBI has introduced multiple electronic methods for nominee registration.

Investors will be able to complete the nomination process using:

• Digital signatures

• Aadhaar-based e-sign facilities

• Electronic signatures

• One-Time Password (OTP) verification through registered mobile numbers and email addresses

Depositories, mutual fund houses, and registrar and transfer agents have been directed to provide both online and offline nomination facilities, ensuring accessibility for all categories of investors.

Regular Reminders for Investors Without Nominees

A key objective behind the revised framework is to reduce the growing volume of unclaimed financial assets.

To achieve this, investors who have neither registered a nominee nor submitted an opt-out declaration will receive reminder notifications twice every year through SMS and email.

Additionally, investment platforms may display pop-up messages highlighting the benefits of nomination whenever such investors log into their accounts.

Why These Changes Matter

SEBI believes that a streamlined nomination process will help families gain timely access to investments and reduce legal hurdles during succession. By removing unnecessary documentation requirements and promoting digital registration, the regulator aims to make financial planning more efficient and investor-friendly.

The new rules are expected to strengthen investor protection, improve asset transfer mechanisms, and ensure that financial wealth reaches nominees or legal heirs without unnecessary delays. For investors, adding a nominee may soon become one of the simplest yet most important steps in securing their family's financial future.