Markets regulator Sebi and the mutual fund industry have introduced measures to simplify the transmission process for mutual fund investments, making it easier for nominees and surviving joint holders to claim the proceeds after the death of an investor.

WHAT DOES TRANSMISSION OF MUTUAL FUND UNITS MEAN?
Transmission of mutual fund units is the process through which units held by a deceased investor are transferred to the nominee, surviving joint holder or legal heir. The process is relatively straightforward if there are joint holders or valid nominees. While mutual funds broadly follow a common transmission process, there may be minor variations in documentation and formats across fund houses. Upon receiving the required documents, fund houses typically complete the transmission within 5-15 working days.

WHAT WAS THE TRIGGER TO STREAMLINE THE TRANSMISSION PROCESS?
Recent reports highlighted the administrative hurdles faced by families while claiming mutual fund investments after the death of a unit holder. To make the process simpler, mutual fund industry body AMFI has introduced a few measures. Where there is a mismatch in the recorded address of the deceased investor, asset management companies (AMCs) will now rely on the latest available address, only if it is backed by valid documents. Fund houses will also adopt a harmonised framework to deal with name and signature mismatches. In the event of a name mismatch, claimants may submit self-certified identity documents such as Aadhaar or Passport. For signature mismatches, registrars and transfer agents (RTAs) will follow the prescribed procedures based on the nature of the discrepancy.

WHAT IS THE PROCESS FOR TRANSMISSION OF MUTUAL FUND UNITS?
Mutual fund units are typically held either in a single name with a nominee registered or jointly with one or more investors. The transmission process depends on the pattern of holding. In the case of jointly held units, if the first holder dies, the units are transmitted to the surviving joint holder, who then become the primary holder. Where the investment is held in a single name, the units are transmitted to the registered nominee. The surviving joint holder or nominee must submit a request for transmission to the fund house, along with the original or a notarised copy of the death certificate and the relevant bank account details. If the nominee is not KYC-compliant, the KYC process must be completed before the transmission is processed. Once the transmission is completed, the nominee may either continue to hold the units or redeem them.

WHAT HAPPENS IF THE INVESTOR DID NOT REGISTER A NOMINEE OR HAD NOMINATED MORE THAN ONE PERSON?
If there are no joint holders or registered nominees, the units are transmitted to the legal heir upon submission of the prescribed legal documents required by the fund house. Where there is more than one nominee, the units are transmitted in the proportions specified by the deceased investor in the nomination form.