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nism-series-va-nomination-limit-incapacitated-investor[ MUTUAL FUND DISTRIBUTORS ]

Under revised SEBI guidelines for mutual fund folios, how many nominees can an investor appoint, and how can a nominee be empowered if the unitholder becomes physically incapacitated?

[ A ]Investors can nominate up to 10 persons (specifying percentage splits); an investor can empower a major nominee to operate the folio and encash assets if the investor becomes physically incapacitated.[ CORRECT ]
[ B ]Investors can appoint exactly 1 nominee who must be an officer of the local high court.
[ C ]Nomination is strictly prohibited for individual folios with investments exceeding Rs. 1 lakh.
[ D ]Investors can nominate up to 100 corporate banks who automatically inherit 100% of the corpus as gifts.
Takeaway

Option A is correct: Investors can nominate up to 10 persons (specifying percentage splits); an investor can empower a major nominee to operate the folio and encash assets if the investor becomes physically incapacitated.

Derivation
Under SEBI's revamped nomination framework: (1) Individual unitholders can nominate up to 10 persons per account/folio, specifying the percentage allocation for each nominee totaling 100% (or equal split if unspecified). (2) Investors have the option to empower any one adult nominee to operate the folio and encash a pre-specified percentage or absolute value of assets if the investor becomes physically incapacitated while retaining capacity to contract. This tests updated nomination rules. The common error is recalling older single-nominee or 3-nominee limits.
Why the others fail
B — Investors can appoint exactly 1 nominee who must be an officer of the local high court.
Investors are not restricted to 1 nominee, and nominees can be family members, minors, or NRIs, not court officers.
C — Nomination is strictly prohibited for individual folios with investments exceeding Rs. 1 lakh.
Nomination is encouraged for all individual folios regardless of investment value to ensure smooth succession.
D — Investors can nominate up to 100 corporate banks who automatically inherit 100% of the corpus as gifts.
Nominees are designated individuals (or charitable trusts), and the maximum number of nominees allowed is 10, not 100.