Claiming a deceased family member's mutual funds made less cumbersome: What SEBI has changed

The process of claiming a deceased loved one's mutual fund investments can be quite cumbersome for families, with even minor inconsistencies in investor records leading to additional paperwork and delays.

To make it easier for nominees and legal heirs, the Securities and Exchange Board of India (SEBI) has asked the Association of Mutual Funds in India (AMFI) to simplify the industry's transmission norms.

“SEBI, as an ongoing investor-friendly initiative, has advised AMFI to further simplify the standards on 'Procedure to Claim Units / Proceeds upon death of a unit holder' to address operational challenges faced by kin of deceased investors during the transmission process for mutual funds," the market regulator said in a press release last week.

According to AMFI, the revised standard operating procedure (SOP) has already been shared with all member asset management companies (AMCs) and is effective on an immediate basis.

One of the key changes concerns discrepancies between the address recorded in the mutual fund folio and the address mentioned in the supporting documents submitted by the claimant. Such a mismatch used to delay the processing of transmission requests, often requiring additional verification and documentation.

Under the revised norms, AMCs can now rely on the latest available address details, provided they are backed by relevant documents.

This move is expected to reduce delays caused by outdated records, particularly in cases where investors have changed their residence over the years without updating the address in every mutual fund folio.

SEBI has also standardised the process for handling mismatches in an investor's name or signature, two common issues that often lead to delays in claim processing of MF units.

Under the revised framework, AMCs may follow procedures similar to those prescribed for Registrar and Transfer Agents (RTAs) under SEBI's Master Circular dated February 6, 2026.

In case of name mismatch, claimants can submit self-certified identity documents such as Aadhaar or a passport, to establish their identity. For signature mismatches, AMCs can follow the framework already prescribed by SEBI for RTAs, depending on the nature of the mismatch.

SEBI has also asked AMFI to conduct training programmes for all entities involved in the transmission process to ensure the revised norms are implemented consistently across the mutual fund industry.

While the new framework is expected to simplify claims and reduce delays, investors can help avoid future complications by ensuring their KYC details, contact information and nomination records are kept up to date.

If the first holder of the mutual fund units passes away, the units are transmitted to the surviving second holder. In case there is only one holder, the units are transmitted to the nominee or the legal heir.

To initiate the transmission process, the claimant needs to submit the transmission request form along with mandatory supporting documents to their respective AMC or RTA such as CAMS or KFintech.

The process can take up to 10 business days after submission of the complete set of required documents, but it depends on the entity handling the transmission.