NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Investor Services
A mutual fund investor wants to appoint a person who will receive the units on the investor's death without going through succession formalities. Which facility should the investor use at the time of investing?
The investor should use the nomination facility. It allows the unit holder to name a person who receives the units on the holder's death, avoiding lengthy succession formalities. A power of attorney lapses on death, while STP and lien marking serve different purposes.
- APower of attorney
- BNominationCorrect
- CSystematic transfer plan
- DLien marking
Explanation
Nomination lets the unit holder name a person to whom units are transmitted on death, simplifying transmission. A power of attorney ends on the principal's death, an STP moves money between schemes, and a lien marking is used for pledging units as security.
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