SEBI extends deadline for nominations framework overhaul feedback

Sebi extends deadline: The Securities and Exchange Board of India (SEBI) has decided to extend the deadline for public comments on the proposal to revamp the nominations framework until March 28. This extension aims to garner further feedback on the initiative, which seeks to reduce unclaimed assets in the securities market.

Initially, Sebi had issued a consultation paper on February 2, soliciting comments on the revision and revamp of nomination facilities within the Indian securities market, with a deadline set for March 8. However, to accommodate more input from stakeholders, the deadline has been extended to March 28.

Asset claim streamlining

The proposed changes to the nominations framework are geared towards streamlining the process for claiming assets by surviving successors of deceased investors and minimising the accumulation of unclaimed assets. SEBI's consultation paper outlined revisions to nomination facilities for various securities, including shares, bonds, units of REITs, InvITs, AIFs, and mutual fund schemes.

Among the suggested modifications, SEBI recommended enhancing the nomination process by allowing digital signatures, Aadhaar-based eSign, or physical signatures for making, changing, or canceling nominations. Furthermore, the regulator proposed increasing the limit on the number of nominees from the current three to a two-digit or three-digit figure, such as 99 or 999, to better accommodate the needs of individual investors.

Legal compliance focus

The primary drivers behind these proposed changes are the prevalence of incomplete or absent nominations for financial assets in the securities market, leading to complications in the transmission process for the deceased's family or successors. SEBI aims to address these issues while ensuring compliance with existing legal frameworks governing transmission and succession rules, particularly in cases of joint holdings or when an investor has left a will.

(With PTI Inputs)