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

Under the nomination facility for mutual fund folios, which of the following statements is correct for a unitholder who holds units in a single name?

A unitholder may opt out of nomination by giving a signed declaration. Nomination is a facility, not an absolute requirement for folio opening, and a nominee acquires rights over the units only after the holder's death, not during the holder's lifetime.

  1. ANomination is compulsory and no folio can be opened without it
  2. BA unitholder may choose to opt out of nomination by signing a declaration to that effectCorrect
  3. CNomination can be made only by a minor's guardian
  4. DA nominee becomes the owner of the units while the unitholder is alive

Explanation

Nomination is available to individuals holding units singly or jointly, and investors may either nominate or sign a declaration to opt out. The nominee gets rights only after the death of the holder, so the claim that a nominee becomes owner immediately is wrong.

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