SEBI simplifies mutual fund management: Nominations optional for these folios

SEBI mutual fund regulations: The Securities and Exchange Board of India (SEBI) has implemented major changes to mutual fund regulations, aiming to enhance the ease of doing business in the capital markets.

One of the key changes introduced by SEBI is the optional nomination for jointly-held mutual fund accounts. This move is expected to simplify procedures and reduce administrative burdens for investors. Under the new guidelines, joint holders of mutual fund folios will have the choice to nominate a beneficiary. This flexibility allows the surviving member to become the nominee in case of the other holder's demise, streamlining the transmission process. However, if investors choose not to nominate, their accounts will remain operational but frozen for withdrawals after June 30, 2024.

According to industry experts, this relaxation in nomination requirements is a positive development as it provides convenience and clarity to investors, particularly in situations involving multiple holders.

Additionally, SEBI has relaxed the provision concerning fund management for commodity and foreign investments. Fund houses now have the option to appoint a single fund manager to oversee both domestic and overseas or commodity-based funds. This move is aimed at reducing operational costs associated with managing mutual funds.

SEBI's decision follows a comprehensive review of mutual fund regulations by a working group convened by the regulator. The group proposed measures to facilitate ease of doing business in the mutual fund industry. Based on the recommendations, SEBI conducted a public consultation, which resulted in the adoption of these regulatory changes.

Overall, the amendments introduced by SEBI are expected to streamline processes, reduce administrative complexities, and enhance operational efficiency in the mutual fund sector. Investors and fund houses alike stand to benefit from these regulatory reforms, which aim to foster a more investor-friendly and business-friendly environment in the Indian capital markets.

(With PTI inputs.)