The Securities and Exchange Board of India has notified rules on nomination allowing nominees to act on behalf of incapacitated investors.
Additionally, it notified the rule mandating every participant to provide beneficial owners with the option to nominate a person to whom their securities will transfer upon their death.
"Every participant shall provide an option to the beneficial owner to nominate, in the manner as may be specified, a person who shall be authorised to conduct transactions on behalf of the beneficial owner in the event of the incapacitation of the beneficial owner," the SEBI said in a notification.
The new rules are aimed at enhancing investor convenience and introducing uniform standards for nomination facilities across the Indian securities market.
In the case of joint ownership, the owners can collectively nominate a person to receive the securities in the event of death of all the joint beneficial owners.
Further, the depository and participant will not be held liable for any action based on the nomination provided by the beneficial owner.
To give this effect, the SEBI has amended Depositories and Participants Regulations that became effective from Nov. 28.
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