NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Investor Services
An investor in a mutual fund scheme wants to nominate a person for the folio. Which statement about nomination in mutual fund units is correct?
Nomination is available to individual investors, singly or jointly, and the nominee gets rights only after the holder's death. During the investor's lifetime the nominee has no claim over the units, and nomination does not make the nominee a joint holder.
- AA non-individual such as a company can nominate a trust in all cases
- BNomination is allowed only for individuals holding units singly or jointly, and a nominee has no rights over the units during the investor's lifetimeCorrect
- CNomination is compulsory and units cannot be bought without it
- DA nominee becomes the joint owner of the units from the date of nomination
Explanation
Nomination facility is available to individuals, and the nominee receives units only on the death of the holder(s). During the holder's life the nominee has no rights. Non-individuals generally cannot nominate, and nominee does not become joint owner.
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