The Association of Mutual Funds in India (AMFI) today announced modifications to its procedure to claim units/proceeds upon death of a unit holder. The trade body specified that in the case of a mismatch in the recorded address of the deceased unit holder, fund houses will have to rely on the latest available address details, provided they are supported by relevant documents. Further, for cases pertaining to name and signature, the AMCs to adopt a similar framework as the one followed by the registrar and transfer agents (RTAs).
Navigating Discrepancies
The RTA framework divides the mismatches in name and signature into minor and major mismatches. For minor mismatches in name between two documents presented by the security holder like initials not being spelt out fully or initials put after or prior to surname, the demat request is processed if the signature in the demat request matches with the signature card with the RTA after the security holder or claimant provides a self-attested copy of an identity proof like Aadhaar, valid passport, driving licence etc. For a major mismatch in name, the security holder is allowed to change his/her name following submission of a marriage certificate or valid passport, in case of name mismatch due to marriage or publication of name change in the official gazette for other cases.
Resolving Signature Disputes
For a minor mismatch in signature, the framework allows the security holder a timeline of 15 days to raise an objection following intimation through speed post, email and SMS. In the absence of an objection, the service request is processed. In the event of a major mismatch or updation/non-availability of the signature, allowing the security holder to register or update the signature by either submitting a cancelled cheque with the security holder’s name or a self-attested copy of the bank passbook/bank statement. Alternately, the security holder can also visit the RTA office in person to sign before the authorized personnel along with PAN card and an additional identity proof.
The move is aimed at simplifying the mutual fund transmission process and specifically eliminate operational friction to ensure that the nominees of deceased investors can claim units/ proceeds smoothly. These updates come in the wake of recent market reports highlighting the administrative hurdles faced by grieving families during the claim process, particularly concerning minor documentation discrepancies.
AMFI communicated the updated SOP guidelines to all member AMCs and specified that they will take effect immediately. AMFI also proposed training initiatives through AMCs to ensure consistent application of the revised procedures and alignment with regulatory guidelines.
Disclaimer: This article is based on a recent ITAT Pune ruling in a specific case. Judicial decisions are fact-specific, and their applicability depends on individual circumstances. Taxpayers should seek professional advice before relying on this ruling for their own cases.
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