Nominee

A nominee, in the context of Indian financial investments, is an individual designated by an investor to receive the proceeds of a financial account — including Demat accounts, mutual fund folios, bank accounts, insurance policies, and fixed deposits — in the event of the investor's death. A nominee is not necessarily the legal heir of the deceased investor — they act as a trustee who receives the assets on behalf of the legal heirs, who then have the right to claim the assets through the legal succession process. SEBI has made nomination mandatory for all Demat accounts and mutual fund folios as part of investor protection measures — investors without a valid nominee are required to provide a declaration opting out of nomination. Failure to update or add a nominee can cause significant delays and legal complications for family members trying to claim investment assets after the investor's death. SEBI's online nomination facility allows investors to add up to three nominees with defined percentage allocation through their broker's or AMC's online portals.