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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Investor Services

A unit holder of a mutual fund dies. The sole holder had registered a nominee in the folio. For the nominee to get the units transmitted, which is generally the correct approach?

When a nominee is registered, the nominee applies for transmission with the death certificate and KYC details, and the AMC transmits the units without insisting on probate. Units are not automatically redeemed, and a distributor has no authority to transfer them.

  1. AThe nominee submits a transmission request with a death certificate and KYC details, and the units are transmitted without probate or succession certificate up to the limits in the rulesCorrect
  2. BThe nominee must always obtain a court probate before the AMC can act
  3. CThe units are automatically redeemed and paid to the nearest relative of the deceased
  4. DThe distributor can transfer the units to the nominee on his own authority

Explanation

Where a nominee is registered, transmission is done on the basis of the death certificate, the nominee's request and KYC, without needing probate or similar documents in the usual case. Automatic redemption and distributor authority do not exist. A court probate is required mainly where no nomination exists and the value is large.

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