NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Investor Services
A mutual fund unitholder wishes to ensure that, in the event of death, units are transferred smoothly to a chosen person without lengthy legal formalities. Which facility serves this purpose?
Nomination is the facility. By naming a nominee in the folio, the unitholder allows units to be transmitted to that person on death with simpler formalities, unlike systematic transfer plans, switches or lien marking, which deal with moving investments or pledging units.
- ASystematic transfer plan
- BNominationCorrect
- CLien marking
- DSwitch facility
Explanation
Nomination lets the unitholder name persons to whom units pass on death, easing transmission. An STP moves money between schemes, lien marking is for pledging units, and a switch moves between schemes.
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