NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Investor Services
Which statement about a nominee in a mutual fund folio is correct?
A nominee receives the units on the unitholder's death as a trustee for the legal heirs rather than as absolute owner, and the unitholder can change or cancel the nomination. Nomination facility is meant for individuals, and nominees need not be SEBI registered.
- AA nominee receives the units as a trustee on behalf of the legal heirs, and the nomination can be changed by the unitholderCorrect
- BA nominee becomes the absolute owner of the units over the legal heirs under the will
- CNomination is compulsory only for non-individual investors
- DA nominee must be a SEBI-registered person
Explanation
A nominee is only a person to whom units are transmitted on the unitholder's death, effectively holding as a trustee for the legal heirs. The unitholder may change or cancel the nomination. Nomination is for individuals, not non-individuals, and the nominee need not be registered with SEBI.
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