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Investing in the share market? If yes then there is important news for you. If you have not yet added nominees to your demat account, problems may arise. The Securities and Exchange Board of India (SEBI) has mandated the addition of nominees to demat accounts. Investors have to do this by 31 December 2023. Let us tell you that mutual fund investors also have to add nominees in their accounts by 31st December. Let’s know what problem can happen if nominee is not added?
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What happens if a nominee is not added?
If stock market investors do not add nominees to their accounts within the prescribed time limit, SEBI can freeze their accounts. This means that investors will not be able to trade. Similarly, if mutual fund investors do not add nominees, they cannot withdraw their funds. Let us tell you that whoever has added the nominee should not repeat this process again.
Why is this process necessary?
Benefit of adding nominee to any account is available in case of emergency. On the death of the account holder, the money or shares in the account are transferred to the nominee. Let us tell you that SEBI had earlier extended the date for adding nominees.
Investors can add nominees by following an online process through their brokerage account. It will take 15 minutes to complete the entire process. Let us tell you that anyone can add 3 nominees.