A nominee in a demat account is the person who can claim the securities held by the account holder in the event of the holder’s death. Nomination is not a transfer of ownership — the nominee acts as a trustee, receiving the assets on behalf of the legal heirs or, where a valid will exists, transferring them per the estate’s legal instructions. Without a nominee, the process of transferring investments to legal heirs can take months or years, involving succession certificates, probate proceedings, and significant legal costs. SEBI’s updated nomination framework, effective March 1, 2025, has significantly overhauled how nominations work for demat accounts and mutual fund folios.
How Many Nominees Are Allowed
Under SEBI’s revised rules effective from March 1, 2025, an investor can declare up to 10 persons as nominees in a single demat account. Earlier, the limit was three nominees. This expanded cap allows investors to distribute their portfolio across family members with precision — particularly useful for large portfolios where different securities or securities blocks are intended for different heirs.
Percentage Allocation Across Nominees
When multiple nominees are declared, the investor must specify the percentage allocation for each — the total across all nominees must add up to 100%. Alternatively, investors can specify absolute values rather than percentages. This allocation determines how the securities are divided among nominees at the time of transmission after the holder’s death.
Who Can Declare a Nominee
Only the registered account holder can declare, modify, or cancel a nomination. A Power of Attorney (POA) holder is explicitly not authorised to handle nomination — regardless of how broad the POA’s mandate is. For joint demat accounts, nomination is optional under the revised rules. For single-holder accounts, SEBI’s new rules (effective September 1, 2026) make nomination effectively mandatory for new accounts — existing account holders must nominate or formally opt out.
What Details Are Required for a Nominee
Under the March 2025 revised SEBI circular, the following details must be provided for each nominee: full name; residential address; email address; telephone or mobile number; and any one of three personal identifiers — PAN card number, driving licence number, or the last four digits of Aadhaar. Importantly, investors only need to provide the document number, not submit physical copies of the documents.
If the nominee is a minor, the guardian’s details and a minor certificate must be provided.
Nomination for Incapacitated Investors
SEBI’s revised framework introduces a new provision: if an investor becomes physically or mentally incapacitated, they can authorise a non-minor nominee to operate the demat account on their behalf. This allows a trusted family member to manage an investor’s securities portfolio when the investor is unable to do so — a practical provision for situations involving serious illness or disability.
Opt-Out of Nomination
Investors who do not wish to nominate anyone are not required to do so — but they must formally opt out by submitting a prescribed opt-out declaration. Simply ignoring the nomination requirement is no longer sufficient. The opt-out declaration must be submitted by the account holder personally — a POA holder cannot submit this either.
Earlier versions of SEBI’s nomination rules (before the March 2025 revision) threatened to freeze accounts without nominations. The revised framework removed that threat — accounts without nominations or opt-out declarations are no longer frozen. SEBI now advises but does not penalise.
Nomination Can Be Modified or Cancelled
The revised framework allows investors to modify, update, or cancel nominations any number of times throughout the account’s lifetime — without limit on the number of changes. Both online (digital) and offline (physical form) options are available for submitting nomination changes.
Overview: Key Nomination Rules
| Rule | Details |
| Maximum Nominees | 10 per demat account |
| Who Can Nominate | Account holder only — not POA holders |
| Documents Required | Document number only (PAN, DL, or last 4 Aadhaar digits) |
| Percentage Allocation | Must total 100% across all nominees |
| Joint Accounts | Nomination optional |
| Single-Holder New Accounts | Mandatory nomination or formal opt-out (from Sept 1, 2026) |
| Incapacitation Provision | Non-minor nominee can operate account if holder is incapacitated |
| Changes Allowed | Unlimited modifications and cancellations |
| Account Freezing | No longer imposed for missing nomination |
| New Nomination Form | Required from June 1, 2025 |
Frequently Asked Questions (FAQs)
Q1. How many nominees can I add to my demat account?
Up to 10 nominees per demat account under SEBI’s revised rules effective March 1, 2025.
Q2. Can a POA holder declare a nominee on my behalf?
No — only the registered account holder can declare, modify, or cancel nominations. POA holders are explicitly excluded from this authority.
Q3. Is nomination mandatory for demat accounts?
For new single-holder accounts opened after September 1, 2026 — yes, either nomination or formal opt-out is required. For existing accounts, SEBI strongly advises but does not freeze accounts for non-compliance.
Q4. What documents need to be submitted for a nominee?
Only the document number of any one identifier — PAN, driving licence, or last four digits of Aadhaar. Physical document submission is not required.
Q5. Does a nominee become the owner of the securities after the account holder’s death?
No — the nominee receives the securities as a trustee. Legal heirs retain the right to claim the assets in accordance with applicable succession laws.
