Sebi Extends Nomination Deadline For Existing Trading, Demat Account Holders Till Sept 30

Earlier the Sebi had asked all eligible trading and demat account holders to provide choice of nomination on or before March 31, failing which the trading and demat accounts would have been frozen

The Securities and Exchange Board of India (Sebi) on Tuesday extended the deadline till September-end for existing trading and demat account holders to provide choice of nomination or opt out of nomination. The earlier the deadline was March 31, 2023.

In July 2021, the Sebi asked all existing eligible trading and demat account holders to provide choice of nomination on or before March 31, 2022, failing which the trading and demat accounts would have been frozen for debits. Later, this was extended by one more year till March 31, 2023.

"Based on the assessment of the trading as well as demat accounts in which choice of nomination details (furnishing of nomination or declaration for opting out of nomination) has not been updated and on the basis of representations received from the stakeholders, it has been decided that the provisions... with regard to freezing of accounts shall come into force with effect from September 30, 2023 instead of March 31, 2023," Sebi said in a circular. Also, the Sebi has asked stock brokers and depository participants to encourage their clients to update 'choice of nomination' by sending a communication on fortnightly basis by way of emails and SMS to all such UCCs/demat accounts wherein the 'choice of nomination' is not captured.

The communication would provide guidance through which the client can provide his/her 'choice of nomination'. Investors who are opening new trading and demat accounts from October 1, 2021 have the choice of providing nomination or opting out of nomination through a declaration form. 

Meanwhile, the Sebi on Monday simplified the procedural requirements for onboarding of Foreign Portfolio Investors (FPIs) in a bid to facilitate ease of doing business and to reduce the time taken for their registration. The regulator allowed designated depository participants (DDPs) to grant FPI registration on the basis of scanned copies of application forms and supporting documents, according to a circular.

Granting of registration on the basis of scanned copies has been allowed but trading can only be activated following the verification of the physical documents, it said. At present, applicants are required to send both scanned copies as well as physical documents of application forms and supporting documents to the DDPs for obtaining the FPI registration. In addition, the Sebi has allowed DDPs to accept the use of digital signatures by FPIs for the execution of registration-related documents.