How to Apply for Mutual Fund Nomination Change in India

Kaustav Chowdhury
Jul 12
5 min read

Nomination in mutual funds determines who receives the units upon the death of the holder. It is not merely a procedural formality; an incorrect or outdated nomination can delay the transmission of funds at a time when the family needs them most. With SEBI overhauling the mutual fund regulatory framework through the SEBI (Mutual Funds) Regulations, 2026 (effective April 1, 2026), and issuing a fresh circular on May 29, 2026 capping the number of nominees, understanding how to update your nomination has become more important than ever.

Why Nomination Matters in Mutual Funds

A nominee acts as a custodian, not an owner, of mutual fund units upon the holder's death. The nominee receives the units or their redemption proceeds and holds them in trust for the legal heirs. This distinction is critical: nomination simplifies transmission but does not override succession law. If the nominee and the legal heir are different individuals, the nominee is legally obligated to hand over the proceeds to the rightful heirs. Understanding the difference between a nominee and a legal heir is essential for effective financial planning.

Key Changes Under SEBI Regulations 2026 and the May 2026 Circular

The SEBI (Mutual Funds) Regulations, 2026, which replaced the 1996 Regulations effective April 1, 2026, introduced a modernised framework for nomination. The May 29, 2026 circular brought further refinements that take effect on September 1, 2026. Here are the significant changes that investors should note.

Maximum nominees reduced: The number of permitted nominees has been reduced from 10 to 3 per folio or account. Investors with more than 3 nominees registered before September 1, 2026 will need to bring their nominations into compliance.

Mandatory for single holders: Nomination is now mandatory for accounts and folios held by a single individual. Investors who do not wish to nominate anyone must submit a formal opt-out declaration. For jointly held folios, nomination remains optional.

Simplified information requirements: The only mandatory details for a nominee are the name and the relationship to the holder. PAN, Aadhaar, and passport details are entirely optional. This is a welcome simplification from earlier practices.

Witness signature eliminated: A witness signature is no longer required when the holder signs the nomination form. The only exception is when the holder affixes a thumb impression instead of a signature, in which case a witness is still needed.

No folio freezing: SEBI has clarified that folios will not be frozen for non-submission of nomination details. Earlier industry speculation about potential account freezing was unfounded.

How to Change Nomination Online

The online process is the most convenient method and can be completed through either the AMC (Asset Management Company) portal or the RTA (Registrar and Transfer Agent) website. The two main RTAs in India are CAMS (Computer Age Management Services) and KFin Technologies.

Step 1: Log in to the AMC portal or the RTA website using your credentials. Most platforms now support OTP-based or two-factor authentication (2FA) for login.

Step 2: Navigate to the "Nomination" or "Update Nomination" section. This is typically found under "Profile," "Account Services," or "Folio Management."

Step 3: Select the folio for which you wish to change the nomination. Enter the new nominee's name and relationship to you. You may add up to 3 nominees and assign percentage allocations that total 100%. PAN or Aadhaar of the nominee is optional.

Step 4: If any nominee is a minor, provide the date of birth and the name and address of the guardian who will receive the units on the minor's behalf.

Step 5: Verify the details and authenticate using OTP or 2FA. Submit the request. You will receive a confirmation via email or SMS. The change typically reflects within 3 to 5 business days.

How to Change Nomination Offline

For investors who prefer the physical route, the process involves submitting a completed nomination form to the AMC or RTA office.

Step 1: Download Form ANF (Appointment of New Nominee Form) from the AMFI website (amfiindia.com) or from the specific fund house's website. The form is also available at investor service centres of AMCs and RTAs.

Step 2: Fill in the folio number, the names of all existing holders (in case of joint holding), the new nominee's name, relationship, and the percentage share. If replacing an existing nominee, indicate this clearly.

Step 3: Sign the form. Under the current rules, a witness signature is not required unless you are using a thumb impression instead of a signature.

Step 4: Submit the form at the nearest investor service centre or mail it to the RTA. Retain a copy with an acknowledgement stamp. Processing typically takes 7 to 10 business days.

Cancelling an Existing Nomination

An investor may modify or cancel the nomination any number of times during their lifetime. To cancel a nomination without appointing a new nominee, the single holder must submit a formal opt-out declaration (for single-holder folios, this opt-out is now a regulatory requirement if no nominee is designated). The cancellation can be done through the same online or offline channels described above.

Nomination for Different Types of Mutual Fund Holdings

For demat holdings, the nomination is registered with the depository participant (DP) and applies to all securities in the demat account, including mutual fund units. Changes must be made through the DP. For folios held in physical (non-demat) mode, the nomination is registered directly with the AMC or RTA. If you hold units in both modes, each requires a separate nomination update. Investors dealing with bank account nominations should note that the process for claiming a deceased person's bank deposits follows a parallel but distinct procedure.

Important Points to Keep in Mind

Nomination does not override a will. If you have both a nominee and a will that names a different beneficiary for the same asset, the will prevails. The nominee holds the asset as a trustee for the legal heirs determined by the will or by applicable succession law. Verifying your CIBIL report periodically can also help ensure that your financial records are clean, since errors in credit records may complicate the transmission of financial assets.

For NRI investors, the nomination process is the same, but transmission may involve additional compliance with FEMA (Foreign Exchange Management Act) regulations. Percentage allocation across multiple nominees must total exactly 100%. An incomplete or ambiguous allocation may lead to disputes during transmission.

Key Takeaways

The SEBI (Mutual Funds) Regulations, 2026 replaced the 1996 framework effective April 1, 2026, and the May 29, 2026 circular caps nominees at 3 per folio from September 1, 2026. Nomination is now mandatory for single-holder folios unless a formal opt-out is filed. Only the nominee's name and relationship are mandatory; PAN, Aadhaar, and passport are optional. Witness signatures are no longer required except when a thumb impression is used. Nomination can be updated online (via AMC or RTA portal with OTP/2FA) or offline (using Form ANF). Nominations can be changed or cancelled any number of times. A nominee is a custodian, not the owner; a will always overrides a nomination for succession purposes.