Circular No. HO/42/36/12(4)2025-OIAE-IAD3, Dated: 11.12.2025
1. Regulatory Update
SEBI has deferred the implementation of Phase III of the Nomination Circular dated January 10, 2025, which had earlier been rescheduled to December 15, 2025. In view of operational challenges faced by market intermediaries and representations from stakeholders, SEBI has now postponed Phase III to a later date, which will be notified separately.
The circular comes into force immediately, but only for the purpose of deferring Phase III.
2. Key Clarifications
- Phase III implementation is deferred – The revised deadline of December 15, 2025 will no longer apply. A fresh implementation date will be announced separately.
- All other provisions remain unchanged – Phases I and II of the Nomination Circular, along with all other obligations, continue to apply as notified.
- Immediate effect – The deferral takes effect immediately upon issuance of the circular.
3. Regulatory Context
The Nomination Circular aims to strengthen investor protection by mandating nomination or opting out across securities market accounts, including demat accounts, mutual fund folios, and other investment holdings. Phase III was expected to address residual and legacy cases requiring enhanced system-level enforcement.
4. Regulatory Intent
The deferral reflects SEBI’s intent to:
- Allow intermediaries additional time to address system, process, and operational readiness
- Avoid disruption to investors due to premature enforcement
- Ensure smoother, uniform implementation across market infrastructure institutions and intermediaries
5. Implications for Market Intermediaries
Intermediaries should:
- Continue compliance with Phases I and II of the Nomination framework
- Pause implementation efforts specifically linked to Phase III
- Maintain readiness to implement Phase III once a revised timeline is notified
- Update internal compliance calendars and client communication accordingly
6. Implications for Investors
- No immediate change in nomination requirements beyond what is already applicable
- Existing nomination or opt-out statuses remain valid
- Further actions, if any, will be required only after SEBI notifies the revised Phase III date
Click Here To Read The Full Circular
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