NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Investor Services
Which of the following is correct regarding nomination in a mutual fund folio held by an individual investor?
A unit holder can add, change or cancel a nomination at any time following the prescribed procedure. The nominee has no claim on the units during the holder's lifetime and gets them only after the holder's death, in the capacity of a person entitled to receive them.
- ANomination is not permitted for mutual fund units
- BA nominee, once registered, can be changed or cancelled by the unit holder at any time by following the prescribed procedureCorrect
- CA nominee becomes the owner of the units while the holder is alive
- DNomination can be made only by non-resident investors
Explanation
The unit holder can make, vary or cancel a nomination through the prescribed procedure. The nominee has no ownership rights during the holder's lifetime; they receive the units only as a custodian on the holder's death. Nomination is available to resident individuals as well, not only NRIs.
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