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nism-series-va-power-of-attorney-nomination-restriction[ MUTUAL FUND DISTRIBUTORS ]

An investor appoints an attorney under a registered Power of Attorney (PoA) to manage their mutual fund folio. Which of the following actions is the PoA holder legally PROHIBITED from performing?

[ A ]Submitting a switch request between two schemes of the same mutual fund

[ B ]Making or changing the nomination in the mutual fund folio[ CORRECT ]

[ C ]Submitting an additional purchase transaction slip with valid funds

[ D ]Submitting a redemption request to the registered default bank account

Takeaway

Option B is correct: Making or changing the nomination in the mutual fund folio

Derivation

A Power of Attorney (PoA) holder acts on behalf of the investor for investment operations. Both the investor (grantor) and the PoA holder must complete KYC and submit a certified copy of the PoA deed. While the PoA holder can execute financial purchases, redemptions, and scheme switches, they are legally barred from making or modifying nominations under the folio, as nomination is a personal statutory right reserved exclusively for the beneficial owner. This tests legal operating boundaries of attorneys. The common mistake is believing a PoA holder has absolute power over estate nominations.

Why the others fail

A — Submitting a switch request between two schemes of the same mutual fund

A PoA holder is legally authorized to execute routine financial transactions, including inter-scheme switches.

C — Submitting an additional purchase transaction slip with valid funds

Submitting additional investment purchase slips falls squarely within the operational authority of a valid PoA holder.

D — Submitting a redemption request to the registered default bank account

Executing redemption requests payable to the investor's registered bank account is a core function permitted for a PoA holder.