Amending the circular issued in May, Sebi said that reference to the term ‘freezing/ frozen’ has been deleted.
Sebi decides to do away with the provision of requiring the freezing of folios without PAN, KYC details and nomination for all holders of physical securities
The Securities and Exchange Board of India (Sebi) on Friday decided to do away with the provision of requiring the freezing of folios without PAN, KYC details and nomination for all holders of physical securities. The rule has come into force with immediate effect, the capital markets regulator Sebi said in a circular.
The decision has been taken after receiving feedback from the Registrars’ Association of India and investors. Under the rule, it was mandatory for all holders of physical securities in listed companies to furnish PAN, nomination, contact details, bank account details and specimen signature for their corresponding folio numbers.
The folios wherein any one of such documents are not available on or after October 1, 2023, is required to be frozen by the Registrars to an Issue and Share Transfer Agents (RTA), Sebi said in May.
Amending the circular issued in May, Sebi said that reference to the term ‘freezing/ frozen’ has been deleted.
“Based on representations received from the Registrars’ Association of India, feedback from investors, and to mitigate unintended challenges on account of freezing of folios and referring frozen folios to the administering authority under the Benami Transactions (Prohibitions) Act, 1988 and/or Prevention of Money Laundering Act, 2002, it has been decided to do away with the above provisions,” Sebi said.
Further, frozen folios were required to be referred by the RTA or listed company to the administering authority under the Benami Transactions (Prohibitions) Act, 1988, and/or Prevention of Money Laundering Act, 2002, if they continue to remain frozen as on December 31, 2025.
In March, Sebi made it mandatory for all demat account holders to either furnish nomination declarations or opt out of nominations by September 30.
In a circular on March 28 this year, the Securities and Exchange Board of India (Sebi) said, “Based on representations received from the market participants, it has been decided that the provision mentioned at para 4 of SEBI circular dated June 15, 2022, with regard to freezing of folios, shall come into force with effect from September 30, 2023, instead of March 31, 2023.”
According to this, failing to nominate may result in the freezing of your mutual fund folio.
(With PTI Inputs)
