AMFI simplifies process for smooth transfer of mutual fund units to nominees, legal heirs

AMFI has simplified the process for transferring mutual fund units and proceeds to nominees and legal heirs after a unit holder's death, allowing AMCs to overlook minor discrepancies such as address mismatches to ensure faster claim settlements.

The Association of Mutual Funds in India (AMFI) on Friday simplified the process for the transfer of mutual fund units and proceeds following the death of a unit holder.

The move by the mutual fund regulator aims to ensure that the beneficiaries and families of the deceased do not face any hurdles while inheriting these units due to minor discrepancies such as address mismatches.

“In cases where there is a mismatch in the recorded address of the deceased unit holder, asset management companies (AMCs) are now advised to rely on the latest available address details, provided they are supported by relevant documents,” AMFI said in its press release.

In cases of discrepancies in the name or signature of the unit holder, the mutual fund regulator has advised AMCs to adopt a similar framework as provided by the Securities and Exchange Board of India (SEBI) pertaining to the issue.

Based on the market regulator’s current framework, AMCs will have to process the transfer request in case of minor discrepancies whilst notifying the unit holder of the mismatch, giving the concerned person a 15-day window to raise any objections.

In case of major discrepancies, AMCs will still have to process the request whilst notifying the concerned party.

The person concerned or beneficiary will then have to update their details through an investor service request form, or by visiting the office of the company involved in transferring the units.

The changes by AMFI come in the wake of concerns raised by investors in recent times about the administrative difficulties faced by families that are already grieving during the claim process, particularly regarding minor discrepancies in documents.

The regulator said that the changes take place with immediate effect, with the updated standard operating procedure notified to all member AMCs.

AMFI also proposed undertaking training initiatives through AMCs to ensure consistent application of the revised procedures and alignment with the regulatory guidelines.

The Association of Mutual Funds in India (AMFI) on Friday simplified the process for the transfer of mutual fund units and proceeds following the death of a unit holder.

The move by the mutual fund regulator aims to ensure that the beneficiaries and families of the deceased do not face any hurdles while inheriting these units due to minor discrepancies such as address mismatches.

“In cases where there is a mismatch in the recorded address of the deceased unit holder, asset management companies (AMCs) are now advised to rely on the latest available address details, provided they are supported by relevant documents,” AMFI said in its press release.

In cases of discrepancies in the name or signature of the unit holder, the mutual fund regulator has advised AMCs to adopt a similar framework as provided by the Securities and Exchange Board of India (SEBI) pertaining to the issue.

Based on the market regulator’s current framework, AMCs will have to process the transfer request in case of minor discrepancies whilst notifying the unit holder of the mismatch, giving the concerned person a 15-day window to raise any objections.

In case of major discrepancies, AMCs will still have to process the request whilst notifying the concerned party.

The person concerned or beneficiary will then have to update their details through an investor service request form, or by visiting the office of the company involved in transferring the units.

The changes by AMFI come in the wake of concerns raised by investors in recent times about the administrative difficulties faced by families that are already grieving during the claim process, particularly regarding minor discrepancies in documents.

The regulator said that the changes take place with immediate effect, with the updated standard operating procedure notified to all member AMCs.

AMFI also proposed undertaking training initiatives through AMCs to ensure consistent application of the revised procedures and alignment with the regulatory guidelines.