New rule for Mutual Fund subscribers: Submit nomination details or opt-out declaration from October 1

For investors subscribing to mutual funds on or after 01 October 2022, it will be mandatory to submit nomination details or the declaration for opting out of the nomination.

New rule for Mutual Fund subscribers: Submit nomination details or opt-out declaration from October 1
Check new mutual fund nomination rule to be applicable from October 1, 2022. Representational image

For investors subscribing to mutual fund units on or after 01 October 2022, it will be mandatory to submit nomination details or the declaration for opting out of the nomination. Through a circular dated 15 June 2022, the Securities and Exchange Board of India (SEBI) mandated the submission of nomination details or declaration for opting out of the nomination for investors subscribing to mutual fund units on or after August 1, 2022.

However, the August 1 deadline has been extended to October 01 2022. “The timeline for the submission has been extended to October 01, 2022,” SEBI said in its latest monthly bulletin for August 2022.

“Also, in the case of online submissions, the AMCs have been permitted to validate the forms also through two-factor authentication (2FA) in which one of the factors has to be a one-time password sent to the unitholder at his/her email/phone number registered with the AMC,” it added.

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SEBI made the change in date based on the representation of the Association of Mutual Funds in India (AMFI). As per the SEBI circular, the Asset Management Company (AMC) has to provide an option to the unit holder (s) to submit either the nomination form or the declaration form for opting out of the nomination in physical or online as per the choice of the unit holders.

GST on SEBI fees

The fees and other charges payable to SEBI shall be subject to GST at the rate of 18 per cent with effect from July 18, 2022, according to the regulator’s circular dated 18 July 2022.

The GST Council in its meeting held on June 28 and June 29, 2022, recommended withdrawing the exemption granted to services by SEBI.

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“Accordingly, all the Market Infrastructure Institutions, Companies who have listed/are intending to list their securities, other intermediaries and persons who are dealing in the securities market, are hereby informed that the fees and other charges payable to SEBI shall be subject to GST at the rate of 18% with effect from July 18, 2022,” the circular said.

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