Demat, trading account will be frozen if nomination not filed by this date

If you have not made a nomination in your demat, trading account or have not yet given a declaration for opting out of making a nomination, then the account will be frozen. Earlier the date to comply with this rule was March 31, 2022. However, the Securities and Exchange Board of India (Sebi), in a circular dated February 24, 2022, has extended this deadline by one year to March 31, 2023.

As per Sebi’s circular dated July 23, 2021, “Investors opening new trading and or demat account(s) on or after October 01, 2021, shall have the choice of providing nomination or opting out nomination, as follows – a) The format for nomination form is given in Annexure – A to this circular, b) opt-out of nomination through ‘Declaration Form’, as provided in Annexure – B to this circular.”

The circular further stated that no witnesses will be required for filing the nomination for the trading and demat account wherever the form is physically signed by the account holder. Further, the nomination/declaration form filed online using e-sign facility will not have witness requirement. However, if the account holder uses thumb impression instead of a signature, then a witness signature will have to be there on the form as well.

“All existing eligible trading and demat account holders shall provide choice of nomination as per the option given in paragraph 2 above, on or before March 31, 2022, failing which the trading accounts shall be frozen for trading and demat account shall be frozen for debits, said the Sebi’s initial circular of July 2021.

Depositories like NSDL, CDSL are sending emails to their clients informing them about the requirement to make nominations in trading, demat accounts.

“Securities Exchange Board of India (SEBI) has mandated submission of nomination details/declaration for opting out of nomination for investors opening new demat account(s) on or after October 01, 2021. SEBI also prescribed mandatory furnishing of the aforesaid information for all existing eligible demat account holders. SEBI has recently extended the last date for submission of nomination/Opt-out of nomination & added one more option for providing the nomination, Investors are requested to take note of the below,” stated the NSDL email sent to customers.

In February 24, 2022, circular, Sebi clarified that providing a mobile number, email-ID, and identification details of the nominee/guardian of the minor nominee have been made optional. Identification details include any one of the nominee photograph and signature, PAN, Aadhaar etc. Earlier, it was mandatory to submit these details of the nominee, while filing the form.