Mutual fund nominee rules — up to 10 nominees, explained

Correction — which circular this is

An earlier version of this page attributed the ten-nominee rule to a SEBI circular dated 10 June 2024, under a circular number we have since been unable to locate in SEBI's register. That attribution was wrong and we are stating so rather than quietly editing it. The URL of this page still carries the old "2024" slug; the slug is kept so existing links do not break, and the correct source is below. If you have cited this page for a June 2024 circular, please update the citation.

What the circular actually says

The rule comes from SEBI circular SEBI/HO/OIAE/OIAE_IAD-3/P/ON/2025/01650, dated 10 January 2025 and titled "Revise and Revamp Nomination Facilities in the Indian Securities Market", effective 1 March 2025, with an amending and clarifying circular issued on 28 February 2025. It allows an investor to nominate up to ten individuals per mutual fund folio or demat account, each with an explicit percentage allocation. The nomination must be made by the investor and cannot be made by a Power of Attorney holder on their behalf. The circular is on sebi.gov.in.

Why this matters

Indian succession reality: most retail investors have several legal heirs — spouse, children, sometimes parents. A single-nominee filing hands the whole asset to one person who is then expected to redistribute it by hand, which is a reliable source of long-running family disputes. Multi-nominee with explicit percentages aligns the operational claim flow with the distribution the investor actually intended.

The mechanics

• Up to 10 nominees per folio.
• Each nominee is assigned a percentage, and the percentages must sum to exactly 100.
• You can name a guardian for each minor nominee.
• Per-folio nomination — not per-scheme. If you hold 5 schemes at one AMC under one folio, the nomination covers all 5.
• You can update any time from your dashboard; updates flow to all your folios at the next RTA reconciliation (usually overnight).

Re-confirmation cadence — what is us, and what is SEBI

The annual prompt is our practice, not a regulatory deadline: we ask you to re-confirm on your folio anniversary and you can confirm in one click if nothing has changed. Skipping it does not freeze the folio; it is logged in the audit trail as evidence that you were offered the opportunity. Where SEBI or your RTA sets its own re-confirmation requirement, that requirement governs and we surface it separately — do not read our prompt as the statutory one.

Common errors we see

• Names that don't match the nominee's ID — the claim flow at death requires the nominee's PAN/Aadhaar to match the name on file. Use legal name, not nickname.
• Minor without guardian. The folio update will reject.
• Percentages adding to 99.99% or 100.01% due to rounding. Use 2-decimal precision.
• Naming a non-resident as the only nominee without realising the cross-border tax/RBI implications at claim time. Consider naming a resident co-nominee.

What it doesn't change

A nominee is still not a legal heir under the Indian Succession Act, the Hindu Succession Act, or the Muslim Personal Law. The Supreme Court's Sarbati Devi v. Usha Devi (1984) and subsequent rulings established that a nominee is a trustee, not a beneficiary, for life insurance — and the principle extends in practice to MF folios. If you want the nominee to also be the legal heir, write a will. Our grievance redressal process can help with the operational claim flow, but estate planning is a separate exercise.